Taiwan's government lowered its GDP growth forecast for 2020 by 0.35 percentage point amid growing concerns about the new coronavirus outbreak's impact on exports.

The government now expects the Taiwanese economy to expand 2.37% in 2020, a slower pace than the 2.71% growth estimated for 2019.

The coronavirus outbreak is likely to dampen growth in exports of goods and services, which is projected to come in at 1.73% in 2020, the government said. Export growth drivers include Taiwan's strong semiconductor manufacturing industry and the rising demand for new technological applications, such as 5G.

Growth in real private fixed capital formation and real private consumption are forecast to hit 3.10% and 1.58%, respectively, this year. "Though the [virus] outbreak might lower the consumer confidence, it is expected that the impact could be partly offset by the emerging e-commerce and food delivery services" the government said.

Full-year inflation is expected to come in at 0.62%, down 0.09 percentage point from the previous forecast.

In the fourth quarter of 2019, Taiwan's GDP grew 3.31% on an annual basis, up from the 3.03% growth rate recorded in the previous quarter, according to primary estimates. Exports grew 2.64% year over year, while real gross capital formation and real private final consumption increased 10.50% and 2.63%, respectively.