Taiwan Economic Forecast

Taiwan Economic Outlook

May 26, 2020

Growth is estimated to have slowed to a four-year low in Q1 2020, as the domestic economy felt the pinch of pandemic-related curbs to activity. Private consumption shrank in the period as households scaled back travel and recreation spending, despite the country’s success in containing the outbreak. However, exports held up well in the quarter as demand for electronics products remained robust. Turning to Q2, a further downturn appears unavoidable: Manufacturing conditions worsened at the sharpest rate in over a decade in April, amid falling confidence levels, slowing output and tumbling demand, as key international markets were curtailed by widespread lockdown measures. Meanwhile, President Tsai Ing-wen started her second and final term in mid-May amid heightening cross-strait tensions: Taiwan’s desire for inclusion at the WHO is a key issue at present.

Taiwan Economic Growth

This year, economic activity is expected to contract slightly on slackening domestic demand amid a worsening external backdrop. External demand for all-important electronics products as key international markets begin to reopen for business clouds the outlook, while tense geopolitical relations are a key risk going forward. FocusEconomics panelists forecast GDP to contract 0.5% in 2020, which is down 0.2 percentage points from last month’s estimate, before growing 3.2% in 2021.

Taiwan Economy Data

2015 2016 2017 2018 2019
Population (million)23.523.523.623.623.6
GDP per capita (USD)22,94123,16125,15425,75025,909
GDP (USD bn)539545593607612
Economic Growth (GDP, annual variation in %)1.52.23.32.82.7
Consumption (annual variation in %)2.92.62.72.02.1
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)13.513.114.011.710.5
Current Account Balance (USD bn)72.871.383.170.864.4
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 %)-15.9-3.012.210.70.4
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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