TAIPEI (Taiwan News) — Taiwan’s economy will barely achieve 2% growth this year due to external factors, one of the country’s leading think tanks said Thursday (April 20).

In a previous forecast, the Chung-Hua Institution for Economic Research (CIER) saw gross domestic product (GDP) expand by 2.72%, but on Thursday, it announced a revision to 2.01%, UDN reported.

The think tank said Taiwan’s foreign trade was unlikely to pick up during the first three quarters of 2023, as the economy was “warm inside (the country), but cold outside.” CIER named international economic uncertainty amid the continuing war in Ukraine and high global inflation levels as key factors in Taiwan’s weaker export performance.

Nevertheless, the forecasters saw an improving picture as the year progressed, with the low point hitting during the first quarter. After growing by only 0.89% from January to March, the economy would expand by 1.71% during the second quarter and by 2.56% in the third quarter, before peaking at 4.51% during the final three months of 2023.

The levels of investment, exports, and imports are all expected to be worse this year than in 2022, said CIER President Yeh Chun-Hsien (葉俊顯), while inflation is expected to reach 2.18%, a higher forecast than other economists, per UDN.

However, domestic consumption shows a brighter picture, especially in the aftermath of COVID-19. Consumption is expected to rise by 4.64%, compared to an increase of 3.59% in 2022.