Taipei, March 25 (CNA) The Yuanta-Polaris Research Institute, one of Taiwan's leading economic think tanks, said Wednesday that it has lowered its forecast for Taiwan's gross domestic product (GDP) growth for 2020 to 1.5 percent, citing the impact of the COVID-19 coronavirus pandemic.
Yuanta-Polaris said the latest forecast represents a 0.7 percentage point downgrade from a previous estimate made in September 2019, as it is impossible for Taiwan to isolate itself from the global damage caused by the virus, which began in the Chinese city of Wuhan at the end of December, and has spread worldwide.
The think tank simply joined other institutions to cut Taiwan's 2020 GDP growth forecast below the 2 percent mark after taking into account the COVID-19 spread.
Last week, Taiwan's central bank downgraded its forecast for Taiwan's GDP growth for 2020 to 1.92 percent from the previous forecast of 2.57 percent, made in December.
In early March, Standard Chartered announced that it expects that Taiwan's GDP will grow 1.9 percent in 2020, a downgrade from its previous forecast of 2.2 percent made in early February.
Liang Kuo-yuan, president of the think tank, told reporters that the virus spread has prompted many consumers here to stay at home and that the impact on business is expected to lead to an increase in workers who suffer unpaid leave.
In addition, Liang said, lockdowns imposed by China and a group of other countries to contain the virus have interrupted Taiwan's exports and imports.
Due to economic uncertainty created by the pandemic, Liang added, enterprises might scale down their investments.
As a result, Yuanta-Polaris has cut its forecast for Taiwan's private consumption and private investment growths for 2020 to 1.04 percent and 2.79 percent, respectively, from an earlier estimate of 2.00 percent and 3.08 percent.
The think tank has also lowered its forecasts for Taiwan's growth of merchandise and service exports and imports for 2020 to 1.27 percent and 1.30 percent, respectively, from 3.13 percent and 3.33 percent.
However, Yuanta-Polaris has raised its forecast for Taiwan's capital formation growth to 3.85 percent from 3.54 percent, citing an increase in government investment aimed at alleviating the impact of the virus spread.
According to the think tank, investment from the government is estimated to grow by 5.31 percent in 2020, a significant upgrade from its earlier forecast of 2.92 percent.
Yuanta-Polaris said Taiwan's GDP is expected to grow 1.10 percent, 1.12 percent, 1.55 percent and 2.18 percent in the first, second, third and fourth quarters of this year, respectively.
Liang said that how the global economy will develop this year will continue to be dictated by the COVID-19 pandemic, and a rebound is unlikely until the third quarter or even in the fourth quarter.
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