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Retail Savings & Investments in Taiwan: Coronavirus (COVID-19) Sector Impact
The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020, and many experts predicting the potential onset of recessionary environments.
With its swift measures Taiwan has effectively contained the spread of the virus, with just over 400 confirmed cases and seven deaths. And the island nation is not currently under any lockdown. However, its economy will be affected as it has significant trade exposure to China, one of the hardest-hit countries and the original epicenter of the outbreak. The central bank has lowered the country's GDP growth forecast for 2020 to 1.92%, down from the previous estimate of 2.57%.
This report focuses on the impact of the coronavirus outbreak on the Taiwanese economy and the country's retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.
- Taiwan's retail savings and investments are forecast to contract by 0.1% over the course of 2020 due to the economic impacts of COVID-19, but strong economic fundamentals and an effective handling of the crisis will see growth bounce back to 8.0% the following year. Retail equity and mutual fund holdings are expected to take the brunt of the economy's slowdown, with respective declines of 18.5% and 12.2% anticipated in 2020.
- Retail deposits and bond holdings are set to fare better than initially expected courtesy of a flight to safety away from risk assets. However, more pronounced declines in risk asset holdings mean GlobalData's total retail holdings forecast for 2020 is 3.0 percentage points (pp) lower than before the onset of COVID-19.
- HNW wealth is forecast to grow by only 0.6% during 2020. However, the effects on the different segments that make up the HNW market will be disproportionate. The healthcare sector - the largest contributor to HNW wealth - is expected to hold up more robustly, as indicated by the 4% decrease of the Biotechnology and Medical Care Index for the year to date compared to the 10% decline of the TAIEX.
- Also working in Taiwan's favor is the low contribution to HNW wealth of industries expected to be strongly hit by COVID-19, such as retail fashion and luxury goods and hotels, restaurants, and leisure.
Reasons to Buy
- Make strategic decisions using top-level revised forecast data on the Taiwanese retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Taiwanese retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Taiwan, including deposits, mutual funds, equities, and bonds.