Taiwan Economic Forecast

Taiwan Economic Outlook

September 21, 2021

After the economy lost momentum in the second quarter amid the reimposition of nationwide restrictions, annual growth has likely slowed down further in the third quarter. However, this is largely owing to a less favorable base effect, as underlying conditions have actually improved amid ebbing daily Covid-19 cases and looser restrictions. Accordingly, data for July–August is upbeat: Exports recorded healthy growth and the non-manufacturing PMI was above Q2’s average. Moreover, consumer confidence improved in the same period, which, together with lower unemployment in July, bodes well for private consumption. In other news, on 9 September the government announced a plan to hand out USD 5.8 billion worth of coupons to boost household spending. The stimulus should work as an indirect relief package for small businesses hit by the pandemic’s fallout.

Taiwan Economic Growth

After expanding rapidly this year, activity is set to lose some momentum in 2022. That said, growth should remain upbeat next year, as the economy will likely emerge relatively unharmed from the health crisis and will benefit from its position as the leader in the global chip market. However, tensions with China pose a downside risk. Our panelists see GDP growing 5.95.8% in 2021, which is unchanged from last month’s estimate, and 3.13.1% in 2022, which is unchangedalso unchanged from last month’s forecast.

Taiwan Economy Data

2015 2016 2017 2018 2019
Population (million)23.523.523.623.623.6
GDP per capita (USD)22,94123,16125,15425,75025,893
GDP (USD bn)539545593607611
Economic Growth (GDP, annual variation in %)1.52.23.32.82.7
Consumption (annual variation in %)2.92.62.72.02.2
Investment (annual variation in %)2.73.4-0.33.09.1
Industrial Production (annual variation in %)-1.32.05.03.6-0.3
Retail Sales (annual variation in %)-1.01.10.92.23.1
Unemployment Rate3.83.93.83.73.7
Fiscal Balance (% of GDP)0.1-0.3-0.10.0-  
Public Debt (% of GDP)36.636.235.535.1-  
Money (annual variation in %)5.83.63.62.74.5
Inflation Rate (CPI, annual variation in %, eop)0.11.71.2-0.11.1
Inflation Rate (CPI, annual variation in %)-0.31.40.61.40.6
Inflation (WPI, annual variation in %)-8.9-3.00.93.6-2.3
Policy Interest Rate (%)1.631.381.381.381.38
Stock Market (annual variation in %)-10.411.015.0-8.623.3
Exchange Rate (vs USD)32.8332.4529.6730.5829.91
Exchange Rate (vs USD, aop)31.7632.2430.4230.1530.90
Current Account (% of GDP)13.513.114.011.710.6
Current Account Balance (USD bn)72.871.383.170.865.1
Trade Balance (USD billion)48.150.058.349.243.5
Exports (USD billion)284279315334329
Imports (USD billion)236229257285286
Exports (annual variation in %)-11.0-1.813.05.9-1.4
Imports (annual variation in %)-15.9-3.012.210.70.3
International Reserves (USD)426434452462478
External Debt (% of GDP)29.531.630.731.530.2

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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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