Taiwan’s banks face down Covid
A sudden spike in Covid-19 cases is set to dent growth in Taiwan – and test banks’ ability to do business virtually.
Taiwan’s success in tackling the coronavirus pandemic right from the outset last year made it one of Asia’s economic winners. But the upbeat outlook is suddenly at risk, thanks to a surge in new cases and crippling power failures.
The Taiwanese economy got off to a roaring start in the first quarter of 2021 as a worldwide trend for working from home during long periods of lockdown turned into strong global demand for the island’s hi-tech exports.
Taiwan’s GDP grew 8.16% in the January-to-March quarter from a year earlier, the fastest pace in more than a decade and up from a fourth-quarter increase of 5.09%. Taiwan is the world’s main supplier of advanced computer chips: the global shortage of semiconductors fuelled demand for its leading computer chip makers such as Taiwan Semiconductor Manufacturing Co (TSMC). That in turn led Taiwan’s National Development Council to forecast economic growth of 4.64% this year.
Total exports rose a better-than-expected 38.7% in April from a year ago, while exports from Taiwan’s technology sector alone surged 33.4% year-on-year in the same month.
But the euphoria didn’t last long.