Taiwan Central Bank warns Wuhan coronavirus could trigger deflation

Economists waiting to see how long epidemic lasts

Taiwan News
Date:\ 2020/03/11
By: Matthew Strong, Taiwan News, Staff Writer

People lining up to buy masks in Taipei Wednesday March 11  (CNA photo)

TAIPEI (Taiwan News) — The Central Bank warned Wednesday (March 11) that the Wuhan coronavirus (COVID-19) could trigger deflation in Taiwan.

Already, the global economy has been feeling the shadow of the epidemic with falling oil prices, extreme instability in the stock markets, and a drop in consumer confidence.

According to a Central Bank report, a plunge in consumption leading to an oversupply of products might easily result in deflation, with prices continuing to fall, CNA reported. Simultaneously, production will fall, wages will shrink, and interest rates and stock prices will plunge.

Predictions for Taiwan’s GDP growth in 2020 have already been slashed, with the government cutting estimates by 0.35 percent to 2.37 percent. Some analysts have even forecast growth dropping below 2 percent.    [FULL  STORY]

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