Taiwan's economy will slow, but not by much

Significance

This is thanks to its extraordinarily successful countermeasures against COVID-19 and also to its key role in the global semiconductor industry. However, starting in April this year, a surge in infections with the Omicron variant began to affect consumer confidence.

Impacts

• Military tension with China, and related Chinese sanctions, are unlikely to have a major effect on the economy compared to other factors.
• Chinese pressure will block Taiwan from joining regional trade agreements, putting Taiwanese firms at a disadvantage.
• Greater awareness of the risk of war in the Taiwan Strait will prompt firms to rethink their exposure to Taiwanese suppliers.