Taiwan Economic Outlook
June 21, 2022After growth moderated in Q1, underlying momentum is easing in Q2. Pandemic-related restrictions in China and generally less favorable global demand conditions are weighing on the external sector and manufacturing. In May, the manufacturing PMI tumbled to a near two-year low and export growth waned, while export orders fell in April. Moreover, the non-manufacturing index plunged into contractionary territory in May, as record Covid-19 cases led to greater caution among consumers and firms. However, the government’s pivot towards living with the virus will limit the fallout. Despite surging caseloads, travel restrictions are being progressively eased, with the quarantine time for visitors cut to three days in June. In other news, Taiwan and the U.S. recently launched a trade “initiative”, signaling warming ties with Washington. However, the shift falls far short of a comprehensive trade deal.
Taiwan Economic GrowthGrowth should be robust this year, thanks to the strong semiconductor industry and a tighter labor market. That said, the ongoing Covid-19 outbreak at home, higher interest rates and a weaker Chinese economy will take the edge off momentum. Rising cross-strait tensions and a potentially prolonged Chinese economic slowdown are risks. FocusEconomics panelists see GDP growing 3.5% in 2022, which is unchanged from last month’s forecast, and 3.0% in 2023.
Taiwan Economy Data
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Taiwan Economic News
June 16, 2022
At its monetary policy meeting on 16 June, the Board of Directors of Taiwan’s Central Bank (CBC) increased the policy rate from 1.375% to 1.50%.
June 8, 2022
Merchandise exports rose 12.5% year-on-year in May, on the heels of April’s 18.8% upturn.
June 7, 2022
Consumer prices increased 0.24% over the previous month in May, which was below the 0.76% increase seen in April.
June 1, 2022
The S&P Global Manufacturing Purchasing Managers' Index (PMI) fell to 50.0 in May from 51.7 in April.
May 23, 2022
Industrial production increased 7.3% year-on-year in April (March: +2.4% yoy).