Taiwan Economic Forecast

Taiwan Economic Outlook

October 18, 2016

After Q2’s positive GDP result, which was the first expansion after three consecutive quarters of contraction, Taiwan’s economy remained resilient in the third quarter of this year. Following a small decrease in July, industrial production rebounded to a 7.7% annual increase in August, thanks to the strong output of semiconductor manufacturers and a favorable base effect. The positive momentum in the manufacturing industry has also been confirmed by September’s PMI, which recorded the highest value in two years. In other news, Fitch Ratings has upgraded Taiwan’s sovereign debt rating from A+ to AA-, with a stable outlook. The agency said that despite the challenging economic environment, Taiwan’s fiscal profile has improved steadily since the new government took office in May 2016.

Taiwan Economy Data

Population (million)23.223.323.423.423.5
GDP per capita (USD)21,04421,34421,89422,69622,469
GDP (USD bn)489498512532528
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-1.1-
Industrial Production (annual variation in %)4.4-
Retail Sales (annual variation in %)
Unemployment Rate4.
Fiscal Balance (% of GDP)-2.1-2.4-1.4-0.8-1.5
Public Debt (% of GDP)
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (WPI, annual variation in %)4.3-1.2-2.4-0.6-8.9
Policy Interest Rate (%)1.881.881.881.881.63
Stock Market (annual variation in %)-21.28.911.98.1-10.4
Exchange Rate (vs USD)30.2829.0529.8331.6332.83
Exchange Rate (vs USD, aop)29.4029.5729.6830.3131.76
Current Account (% of GDP)8.29.510.412.014.4
Current Account Balance (USD bn)39.947.353.163.876.2
Trade Balance (USD billion)24.929.133.438.248.1
Exports (USD billion)313306311320285
Imports (USD billion)288277278282237
Exports (annual variation in %)12.6-
Imports (annual variation in %)12.4-
International Reserves (USD)386403417419426
External Debt (% of GDP)25.126.333.233.530.1

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Taiwan Facts

Bond Yield0.901.13 %Oct 20
Exchange Rate31.590.39 %Oct 20
Stock Market9,3170.36 %Oct 20

Taiwan Economic Growth

October 18, 2016

While economic activity is likely to have proved resilient in the third quarter, Taiwan’s domestic demand remains weak and the external sector remains highly vulnerable to global economic headwinds. FocusEconomics panelists forecast that GDP will rise 1.0% this year, which is unchanged from last month's projection. Next year, the panel expects GDP growth to accelerate to 1.7%.

Taiwan Economic News

  • Taiwan: Exports fall and trade surplus narrows in September

    October 9, 2016

    In September, the trade surplus totaled USD 4.4 billion, according to data from the Ministry of Finance.

    Read more

  • Taiwan: Inflation moderates further in September

    October 5, 2016

    In September, consumer prices increased 0.45% over the previous month, which was a rebound from the 0.03% fall recorded in August.

    Read more

  • Taiwan: Manufacturing PMI hits two-year high in September

    October 3, 2016

    Taiwanese manufacturers registered better business conditions for the fourth consecutive month in September.

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  • Taiwan: Central Bank halts easing cycle on healthy economic growth

    September 29, 2016

    At its quarterly monetary policy meeting on 29 September, the Central Bank of the Republic of China (Taiwan) decided to leave the discount rate unchanged at 1.375%, which was a decision that markets had expected, although some analysts had foreseen a further reduction to the key policy rate. The Central Bank has cut the main monetary policy rate four times since September 2015 by a total of 50 basis points and this time the authority decided to leave interest rates unchanged “against a back drop of moderate global growth and renewed momentum for the domestic economy, along with a mild inflation outlook for next year.” Regarding global developments and how they affect the Taiwanese economy, the Central Bank stated that the global economy continues to decelerate as a result of slower economic growth in the U.S., a still tepid recovery in the Eurozone economy and sluggish economic activity in Japan.

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  • Taiwan: Industrial production benefits from Apple’s new iPhone debut

    September 27, 2016

    Taiwan’s industrial output increased substantially in August, backed by a base effect but also due to strong growth in semiconductor manufacturers’ output, which benefited from the debut of Apple’s latest iPhone model.

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