TAIPEI (CNA) — The coronavirus epidemic that has gripped China and been declared a global public health emergency should not significantly affect Taiwan’s overall economy in the short term but could hurt the tourism and aviation sectors, economists said Monday.
The coronavirus has claimed the lives of at least 361 people in China and infected more than 17,000 people, and there are no signs it will soon be brought under control, casting a shadow over China’s economic prospects, global growth, and the world’s financial markets.
The epidemic has also sparked speculation that Taiwanese think tanks and research institutes could cut forecasts for Taiwan’s GDP growth in 2020.
Taiwan Institute of Economic Research (TIER) President Chang Chien-yi (張建一) said, however, that the epidemic’s impact on Taiwan’s economy is likely to be short-lived and that the think tank has no plans to revise its growth forecast.
The TIER raised its forecast for Taiwan’s 2020 economic growth to 2.67 percent in January, 0.22 percentage points higher than its previous estimate in November 2019.
Chang did say the epidemic could chip away at investment confidence and have a major impact on specific sectors, including the tourism, travel, and transportation sectors, but he believed targeted measures would be introduced to help those industries.
The epidemic will only slightly affect the technology and manufacturing sectors because domestic factories are still running normally, Chang said.
He cautioned, however, that some Taiwanese contract manufacturers in China could fall behind schedule because company openings in China have been postponed to Feb. 10 due to the coronavirus outbreak.
Chou Yeu-tien (周雨田), a research fellow with the Institute of Economics at Academia Sinica, agreed that the epidemic would not have a major impact on the domestic economy, but Taiwan still had to keep a close watch on the spread of the virus in China.
The institute forecast in December that Taiwan would post GDP growth of 2.58 percent in 2020.
Although the epidemic’s overall economic impact remains unclear, Chou said, he warned that if it causes China’s first-quarter economic growth to drop by 0.5-1 percentage points as forecast by an American financial services company, then Taiwan’s economy will also feel the pinch.