Water Shortages, Not COVID, Could Derail Taiwan’s Economy
- By Caroline Grady
- 2 min read
Taiwan’s currency and stock market have come under pressure from an unprecedented spike in new COVID cases. The island is now under a ‘soft lockdown’ leaving mobility restrictions as a threat to the country’s recovery. But we expect the current weakness to be short lived. A 14% of GDP C/A surplus, fairly robust domestic momentum and dominance in semiconductors leave the economy and markets. Foreign equity inflows have resumed after an initial sharp outflow and wider tech sentiment has improved.
New COVID cases have hit an unprecedented high in Taiwan. Before mid-May, Taiwan’s daily high had been just 27 cases (in March 2020), and it had recorded only 12 COVID deaths. But from just 1290 total cases through May 14 this more than doubled in just one week (Chart 1).
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