Despite the recent surge in local COVID-19 infections, Taiwan’s economy should still manage to grow by 4.1% this year, the Taiwan Institute of Economic Research (TIER) forecast Tuesday, 25 January.
While this prediction is the same it made last November, the think tank cautioned that factors such as the onslaught of the Omicron variant, the threat of inflation, economic problems in China, and U.S. monetary policy could still influence growth.
TIER said the global spread of the latest COVID strain has disrupted the stability of supply chains and caused labor shortages, CNA reported.
However, at the same time, the mortality rate of Omicron is lower than that of previous strains, with most important economies unlikely to reimpose tough restrictions, allowing the global economy to continue its recovery.
In Taiwan, the service sector will feel the impact of Omicron during the first quarter, but if the surge is brought under control, business will soon improve, according to TIER. Hikes of the minimum wage and salaries of government employees as well as higher year-end bonuses will increase general disposable income and further fuel the domestic recovery, the institute predicted. (Courtesy of Taiwan News)