Service sector

Service industry still in virus crisis: institute

  • By Crystal Hsu / Staff Reporter

The services sector has yet to emerge from a slump amid the COVID-19 pandemic, although the rate of decline eased in the last quarter, the Commerce Research Institute (商業發展研究院) said yesterday. .

The coincident cyclical composite index for the services industry continued to decline in the last quarter and did not hit its lowest level in October last year as expected after the launch of the government’s Quintuple Stimulus Voucher scheme, said the Taipei-based research organization.

The decline continued in January, although the leading cyclical composite index has been rising since July 2020, indicating that economic development is uneven, the institute said.

The results reflected weak domestic demand, which persisted amid COVID-19 fears, geopolitical disputes and extreme weather factors that could continue to dampen the economy, he said.

The shadow of “stagflation” – a situation of high inflation and unemployment and slow growth – looms after Russia’s February 24 invasion of Ukraine, adding to rising energy prices and raw materials, he said.

While Taiwan recorded impressive GDP growth last year on the back of strong manufacturing activity and exports, private consumption remained weak, the institute said.

Indeed, the services sector has been hit hard by pandemic-related restrictions, he said.

Government rescue and stimulus programs have provided short-term relief, but have failed to induce industrial transformation or upgrading so that service providers can become more resilient and competitive, he said. he declares.

Australia, Canada, the EU, Japan and the United States have imposed economic sanctions on Russia, putting the world at greatest risk of stagflation since the energy crisis of the 1970s, he said. .

Taipei should quickly draw up plans to compensate for lost imports to maintain a balance between supply and demand and work more closely with the private sector amid digital transformation and shifts to business models. environmental, social and corporate governance issues, the institute said.

Overreliance on foreign markets should be reduced to strengthen Taiwan’s economic resilience and make it less susceptible to external shocks, he said.

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