Experts at Taiwan’s top research institute, Academic Sinica, predict that Taiwan could see economic growth of 1.15% this year. The Institute of Economics at Academic Sinica released this latest projection on Wednesday.
Researchers say that the COVID-19 pandemic has hit the global economy, and with it, Taiwan’s foreign trade. However, they also say that Taiwan’s success in stopping COVID-19 has combined with other factors to allow the domestic economy to begin gradually recovering.
These other factors include investment from Taiwanese businesses bringing back their operations from overseas, a shift of export orders from China to Taiwan, and government efforts to speed infrastructure projects and stimulate the economy.
Researchers at Academia Sinica say that a government voucher program aimed at stimulating consumption could be particularly effective. They say that looking at similar programs in the past, they predict that the vouchers alone can be expected to grow the economy by 0.4%.
However, they also caution that risks to Taiwan’s economy remain. They say the US-China trade war, geopolitical tensions, and financial markets weakened by debt are particular risks to watch out for.