Taiwan’s coronavirus outbreak leaves services sector reeling as new curbs bite

New restrictions on gatherings and movement in Taiwan pose a threat to the island’s vital service sector, which makes up nearly two-thirds of GDP

Measures that stretch to late June, causing consumption of services to fall, could wipe 0.5 to 1 percentage point off the 2021 GDP forecast, analysts say

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A spike in community transmissions has alarmed Taiwanese authorities, who have raised the alert level to three in a four-tier system. Photo: Reuters

Published: 6:15am, 22 May 2021Updated: 6:30am, 22 May 2021

Taiwan’s all-important service sector will shrink and dent gross domestic product (GDP) growth if new restrictions imposed to curb a spike in Covid-19 infections last another month or two, eating into economic expansion that outpaced most of the world last year, economists say.

But Taiwan’s manufacturing sector – a key source of the world’s semiconductors, PCs and machinery – is expected to stay strong.

The island has recorded 1,889 coronavirus cases for the past 11 days, with most caused by local transmission in greater Taipei, the Taiwan Central Epidemic Command Centre said.

This outbreak makes everything difficult. We weren’t prepared because this came along so suddenly

Hung Chia-chun

The spike in community transmissions has alarmed authorities who have raised the alert level to three in a four-tier system, prompting closures of libraries, recreation centres, exhibition halls and cinemas.

Many residents in the capital are staying home, and the president, premier and economy ministry have urged people not to panic buy items amid the uncertainty.

Even before Taipei ordered most food outlets to stop dine-in services on Thursday, only a trickle of people sat in the city’s cafes and restaurants, with plenty of space between groups.