Taiwan Economic Outlook
December 13, 2019Annual economic growth accelerated in the third quarter, powered by strong private consumption, government spending and a resilient external sector. However, the economy likely lost momentum in Q4. Industrial output fell in October and the manufacturing PMI for November remained in contractionary territory, pointing to weaker business activity. Moreover, tourism figures dipped in October—likely hit by China’s attempts to curb visits to the island—although remained strong for the year to date. More positively, external trade remains robust, with Taiwan benefiting from trade diversion from China due to the U.S.-China trade war. Meanwhile, Taiwan goes to the polls in early January to elect a new president and legislature, with China relations at the forefront of voters’ minds. The pro-independence DPP looks likely to retain the presidency, which could have detrimental effects on the external sector going forward.
Taiwan Economic GrowthNext year, economic growth is expected to slow slightly, in part due to waning growth in mainland China and the U.S., although trade diversion from China should support the economy. Tense relations with the mainland pose a downside risk to the outlook. FocusEconomics panelists forecast GDP growth of 2.1% in 2020, which is up 0.1 percentage points from last month’s forecast, and 2.2% in 2021.
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Taiwan Economic News
January 22, 2020
Industrial output increased 6.0% in December compared to the same month a year earlier, quickening from the 1.8% increase recorded in November. The acceleration in December was chiefly driven by strong output growth in the manufacturing sector, which represents more than 90% of total industrial production, while a return to expansion in electricity and gas supply supported the overall figure.
January 21, 2020
The economy grew 3.4% in the final quarter of 2019 compared to the same period a year earlier, according to an advance GDP estimate, up from the third quarter’s 3.0% increase.
January 7, 2020
Consumer prices increased 0.04% in December compared with the previous month, contrasting the 0.41% decrease in November.
January 7, 2020
Merchandise exports increased 4.0% in December in annual terms, following November’s 3.3% expansion.
January 2, 2020
The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, rose to 50.8 in December from 49.8 in November, thus moving above the 50-threshold and signaling the first improvement in operating conditions in over a year. The improvement came amid an uptick in the amount of new work received by manufacturers, ending a 15-month run of contraction.