Moody’s downgrades outlook for Taiwan’s economy

Moody’s Investors Service has lowered its economic outlook for Taiwan from “positive” to “stable”. Moody’s said the decision to change the outlook reflects its assessment that cross-strait tensions have picked up, alongside rising strains in the relationship between China and the US. Moody’s said Taiwan’s inflation-adjusted gross domestic product (GDP) growth would remain above its potential at about 3 to 3.5% this year, slowing from 6.6% last year. It added that it expects 2.5% growth on average in the coming years, higher than most economies. It said Taiwan’s growth momentum is one of the least volatile among its peers despite its heavy reliance on external demand, thanks to its leadership in the information and communications technology sector.