Taiwan Economic Outlook
May 26, 2020Growth 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 GrowthThis 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.
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Taiwan Economic News
July 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, rose to 46.2 in June from 41.9 in May, thus pulling away from May’s 11-year low reading.
June 23, 2020
Industrial output rose 1.5% year-on-year in May (April: +4.2% yoy).
June 18, 2020
At its monetary policy meeting on 18 June, the Board of Directors of Taiwan’s Central Bank unanimously decided to maintain the discount rate unchanged at the record low of 1.125%.
June 8, 2020
Merchandise exports contracted 2.0% in annual terms in May, following April’s 1.3% fall.
June 5, 2020
Consumer prices fell 0.10% over the previous month in May, a softer decrease than April's 0.20% drop.