Taiwan Economic Forecast

Taiwan Economic Outlook

March 19, 2019

The economy appears set for another slowdown in the first quarter of this year, after growth decelerated noticeably in the fourth quarter of last year. The manufacturing PMI fell to the lowest level in three-and-a-half years in February, indicating a quickening contraction in the goods-producing sector. The deterioration in February came on the back of falling demand in key export markets such as mainland China and Hong Kong. This was corroborated by separate customs data, which showed merchandise exports fell at the fastest pace in three years in February; moreover, export orders, which usually lead actual exports by two to three months, fell for the third consecutive month in January, the latest month for which data is available. On a more positive note, however, the unemployment rate dipped to an eight-month low in February, and consumer and business confidence ticked up slightly.

Taiwan Economic Growth

With the persistent U.S.-China trade spat, an ongoing mainland slowdown and rising cross-strait tensions, the economic outlook appears less bright this year compared to last year. That said, fiscal stimulus in the form of a large infrastructure investment plan should support domestic momentum in the coming months. FocusEconomics panelists forecast GDP growth of 2.1% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.1% again in 2020.

Taiwan Economy Data

20132014201520162017
Population (million)23.423.423.523.523.6
GDP per capita (USD)21,89422,71622,55922,62924,402
GDP (USD bn)512532530533575
Economic Growth (GDP, annual variation in %)2.24.00.81.42.9
Consumption (annual variation in %)2.33.42.62.32.3
Investment (annual variation in %)5.32.11.62.30.0
Industrial Production (annual variation in %)3.26.4-1.32.05.0
Retail Sales (annual variation in %)2.03.90.31.91.2
Unemployment Rate4.24.03.83.93.8
Fiscal Balance (% of GDP)-1.4-0.80.1-0.3-1.4
Public Debt (% of GDP)33.832.831.631.230.7
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)9.711.414.113.714.4
Current Account Balance (USD bn)49.960.474.972.882.9
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)33.233.430.032.331.6

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Taiwan Facts

ValueChangeDate
Bond Yield0.811.28 %Mar 20
Exchange Rate30.750.07 %Mar 20
Stock Market10,5520.37 %Mar 20

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