TAIPEI (Taiwan News) — According to S&P Global Ratings, Taiwan’s gross domestic product (GDP) will only grow by 1.5% next year, lower than the 2.53% figure recently issued by the Central Bank, reports said Wednesday (Dec. 21).

The American credit rating group, which also includes Taiwan Ratings, predicted 2.5% growth for this year, and was still forecasting at least 2% for 2023 during last summer, the Commercial Times reported.

At a news conference Wednesday, Taiwan Ratings predicted that the economies of the US and of the European Union would either fail to grow or even contract during the next year. The drop in global demand will pose grave problems for Taiwan’s exports, Taiwan Ratings economists said.

The country’s flourishing semiconductor sector could bear the brunt of the slowdown, though the sale of consumer products was also likely to take a hit. While the expression “moderate growth” could be used to describe next year’s economy, a major degree of uncertainty would persist as a result of the COVID-19 pandemic, inflation, regional political risks, and monetary policies, Taiwan Ratings analysts said.