Taiwan Economic Forecast

Taiwan Economic Outlook

December 13, 2019

Annual economic growth accelerated in the third quarter, powered by strong private consumption, government spending and a resilient external sector. However, the economy likely lost momentum in Q4. Industrial output fell in October and the manufacturing PMI for November remained in contractionary territory, pointing to weaker business activity. Moreover, tourism figures dipped in October—likely hit by China’s attempts to curb visits to the island—although remained strong for the year to date. More positively, external trade remains robust, with Taiwan benefiting from trade diversion from China due to the U.S.-China trade war. Meanwhile, Taiwan goes to the polls in early January to elect a new president and legislature, with China relations at the forefront of voters’ minds. The pro-independence DPP looks likely to retain the presidency, which could have detrimental effects on the external sector going forward.

Taiwan Economic Growth

Next year, economic growth is expected to slow slightly, in part due to waning growth in mainland China and the U.S., although trade diversion from China should support the economy. Tense relations with the mainland pose a downside risk to the outlook. FocusEconomics panelists forecast GDP growth of 2.1% in 2020, which is up 0.1 percentage points from last month’s forecast, and 2.2% in 2021.

Taiwan Economy Data

2014 2015 2016 2017 2018
Population (million)23.423.423.523.523.6
GDP per capita (USD)21,89422,71622,55922,66124,480
GDP (USD bn)512532530533577
Economic Growth (GDP, annual variation in %)2.24.00.81.53.1
Consumption (annual variation in %)2.33.42.62.42.5
Investment (annual variation in %)5.32.11.62.4-0.1
Industrial Production (annual variation in %)3.26.4-1.32.05.0
Retail Sales (annual variation in %)0.82.8-1.01.10.9
Unemployment Rate4.24.03.83.93.8
Fiscal Balance (% of GDP)-1.4-0.80.1-0.3-0.1
Public Debt (% of GDP)39.037.836.636.235.5
Money (annual variation in %)5.86.15.83.63.6
Inflation Rate (CPI, annual variation in %, eop)0.30.60.11.71.2
Inflation Rate (CPI, annual variation in %)0.81.2-0.31.40.6
Inflation (WPI, annual variation in %)-2.4-0.6-8.9-3.00.9
Policy Interest Rate (%)1.881.881.631.381.38
Stock Market (annual variation in %)11.98.1-10.411.015.0
Exchange Rate (vs USD)29.8331.6332.8332.4529.67
Exchange Rate (vs USD, aop)29.6830.3131.7632.2430.42
Current Account (% of GDP)9.711.414.113.414.5
Current Account Balance (USD bn)49.960.474.871.683.5
Trade Balance (USD billion)33.438.248.149.858.0
Exports (USD billion)311320285280317
Imports (USD billion)278282237231259
Exports (annual variation in %)1.62.8-10.9-1.813.2
Imports (annual variation in %)0.21.4-15.8-2.812.4
International Reserves (USD)417419426434452
External Debt (% of GDP)33.233.430.032.331.5

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Taiwan Facts

Value Change Date
Bond Yield0.691.28 %Dec 31
Exchange Rate29.910.07 %Jan 01

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Taiwan Economic News

  • Taiwan: Industrial production soars in December

    January 22, 2020

    Industrial output increased 6.0% in December compared to the same month a year earlier, quickening from the 1.8% increase recorded in November. The acceleration in December was chiefly driven by strong output growth in the manufacturing sector, which represents more than 90% of total industrial production, while a return to expansion in electricity and gas supply supported the overall figure.

    Read more

  • Taiwan: Economic activity accelerates in Q4

    January 21, 2020

    The economy grew 3.4% in the final quarter of 2019 compared to the same period a year earlier, according to an advance GDP estimate, up from the third quarter’s 3.0% increase.

    Read more

  • Taiwan: Inflation accelerates in December

    January 7, 2020

    Consumer prices increased 0.04% in December compared with the previous month, contrasting the 0.41% decrease in November.

    Read more

  • Taiwan: Exports and imports both climb in December, while trade surplus declines

    January 7, 2020

    Merchandise exports increased 4.0% in December in annual terms, following November’s 3.3% expansion.

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  • Taiwan: Manufacturing PMI ends the year on a positive note

    January 2, 2020

    The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, rose to 50.8 in December from 49.8 in November, thus moving above the 50-threshold and signaling the first improvement in operating conditions in over a year. The improvement came amid an uptick in the amount of new work received by manufacturers, ending a 15-month run of contraction.

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