Taiwan Economic Forecast

Taiwan Economic Outlook

May 21, 2019

The economy slowed again in the first quarter of 2019 after a meek showing in the previous quarter, as weak export demand continued to restrain momentum. Export growth ticked down, likely due to contracting goods exports; imports, however, also slowed markedly, which supported the headline growth print. Meanwhile, domestic demand also weakened somewhat: Private consumption growth edged down despite a rebound in the stock market, while government consumption contracted and total investment also slowed. Turning to Q2, the picture remains bleak, with March export orders and April trade data indicating that exports likely contracted throughout the quarter. Moreover, Taiwan is extremely vulnerable to the possible imposition of new tariffs on Chinese imports from the U.S.—including tech products—which will likely weigh on business sentiment and investment in the quarter.

Taiwan Economic Growth

Growth is set to slow this year due to lower tech export demand and a slowdown in mainland China. Furthermore, an escalation of the U.S-China trade war is a key downside risk as Taiwan is heavily involved in the Chinese electronics supply chain. Nevertheless, public infrastructure investment, and low unemployment and inflation should support domestic dynamics. FocusEconomics panelists forecast GDP growth of 2.1% in 2019, which is up 0.1 percentage points from last month’s forecast, and 2.1% again in 2020.

Taiwan Economy Data

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)3.26.4-
Retail Sales (annual variation in %)
Unemployment Rate4.
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)0.81.2-
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

Bond Yield0.711.28 %Jun 13
Exchange Rate31.480.07 %Jun 13
Stock Market10,5610.37 %Jun 13

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