Taiwan Economic Outlook
August 25, 2020The economy contracted at the sharpest pace in over a decade in Q2, battered by Covid-19. The downturn was chiefly driven by a collapse in tourist arrivals, which hammered the external sector, while the constraining effects of the lockdown on household spending led to the largest drop in private consumption on record. Meanwhile, investment activity held up fairly well in Q2, supported by robust global demand for the country’s technology exports, which softened the overall blow. Turning to Q3, available data points to a gradual recovery. In July, the manufacturing PMI rebounded to a six-month high, consumer confidence edged up and merchandise exports rose for the first time since February. That said, business confidence inched down in the same month, while the tourism sector remained in the doldrums, signaling headwinds to recovery ahead, despite the government’s USD 35.9 billion fiscal stimulus package.
Taiwan Economic GrowthThe economy is expected to grind to a halt this year, mainly due to a slump in household consumption and as challenging external conditions weigh on exports. Moreover, investment activity will likely cool, but still remain expansionary, thanks to a booming technology sector. The risk of a second outbreak and heightened geopolitical tensions with China cloud the outlook. FocusEconomics panelists see GDP growth to stagnate at 0.0% in 2020, which is up 0.3 percentage points from last month’s estimate, before growing 3.0% in 2021.
Taiwan Economy Data
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Taiwan Economic News
September 17, 2020
At its monetary policy meeting on 17 September, the Board of Directors of Taiwan’s Central Bank unanimously decided to keep the discount rate unchanged at the record low of 1.125%.
September 8, 2020
Consumer prices edged up 0.18% over the previous month in August, following July’s 0.14% rise.
September 7, 2020
Merchandise exports jumped 8.3% in annual terms in August, rising more significantly than July’s 0.4% increase and marking the highest reading in the six months.
September 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), released by IHS Markit, rose to 52.2 in August from 50.6 in July.
August 25, 2020
Industrial output increased 2.6% compared to the same month of the previous year in July, which followed June's 7.2% increase.