Two Taiwanese officials say that a new forecast predicting that Taiwan’s GDP will shrink this year has failed to take Taiwan’s success against COVID-19 into account.
The new forecast is part of a prediction about global GDP growth that the International Monetary Fund (IMF) puts out in April every year. These latest predictions assume that the COVID-19 pandemic will ease off during the second quarter of 2020, and that governments will gradually ease their disease control measures.
The IMF forecasts that even if these conditions are met, Taiwan’s GDP will still shrink by 4%. This forecast has surprised a number of think tanks: in October last year, before the pandemic began, the IMF had said that Taiwan’s GDP should grow by 1.9% in 2020. Meanwhile, Taiwan’s own government statistics office had earlier said it believed 2% growth would be possible.
On Wednesday, Chairman of the Financial Supervisory Commission Wellington Koo spoke to reporters about the IMF’s revised prediction. He said unpredictable factors like COVID-19 make it impossible to create accurate economic forecasts. He also said he believes the IMF has overlooked Taiwan’s success at keeping COVID-19 under control.
Meanwhile, Finance Minister Su Jain-rong says that the IMF has based its latest prediction on Taiwan’s reliance on exports, and on the heavy impact of COVID-19 in major markets like the US and EU. However, Su said that a relief budget will soften the blow to Taiwan’s economy, and that increased domestic demand may make up for lost export revenues.