Economic Growth in Taiwan
Taiwan's economy recorded an average growth rate of 3.2% in the decade to 2022, below the 4.4% average for Asia-Pacific. In 2022, real GDP growth was 2.4%. For more GDP information, visit our dedicated page.
Taiwan GDP Chart
Taiwan GDP Data
|Economic Growth (GDP, ann. var. %)||2.8||3.1||3.4||6.6||2.6|
|GDP (USD bn)||609||612||676||775||761|
|GDP (TWD bn)||18,375||18,909||19,915||21,663||22,680|
|Economic Growth (Nominal GDP, ann. var. %)||2.2||2.9||5.3||8.8||4.7|
GDP growth accelerates in Q3
GDP growth gathered steam to 2.3% year on year in the third quarter, up from 1.4% in the second quarter and beating market expectations. Q3's reading marked the best result since Q3 2022. On a seasonally-adjusted quarter-on-quarter basis, economic growth improved to 2.5% in Q3, from the previous quarter's 1.4% expansion.
Private consumption growth waned to 8.9% year-on-year in Q3 compared to a 12.6% expansion in Q2. However, private spending was still the key driver of the economy, underpinned by higher spending on transport, hospitality, restaurants, recreation, vehicle purchases and outbound tourism. Government consumption growth, meanwhile, clocked in at 0.7% (Q2: +1.6% yoy), while gross capital formation plunged 14.0% (Q2: -13.4% yoy) on lower investment in construction and machinery. On the external front, exports of goods and services declined at a slower rate of 1.0% year on year in the third quarter (Q2: -7.0% yoy). In addition, imports of goods and services dropped at a milder pace of 4.9% in Q3 (Q2: -7.8% yoy).
Our Consensus is for ongoing GDP expansions in quarterly and annual terms in Q4. Exports could recover slightly in the quarter thanks to stronger global AI demand and the fading of past inventory drawdowns by firms, while low inflation and unemployment will continue to bolster private consumption.
On the Q3 data, EIU analysts said: “The resilience of the domestic consumption landscape has […] exceeded our expectations. Accelerating household expenditure, in particular, came despite moderating retail sales (which represents a combination of household and enterprise consumption) over the same period; retail sales growth slowed to 5.2% year on year in July-September, from 12.8% in the second quarter. Resilience in consumption has offset negative shocks to domestic demand recorded elsewhere, including from gross capital formation.” On the outlook, United Overseas Bank’s Ho Woei Chen said: “Near-term prospects for private consumption remain positive on the back of an increase in employment and wage growth. The planned minimal wage hike and public sector pay raise next year will be an added boost. While there have been tentative signs of the electronics sector bottoming out, the recovery has been slow due to a weak global demand. […] The restrictive monetary policy setting in the major economies will also hinder the recovery in investment.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Taiwanese GDP projections for the next ten years from a panel of 29 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Taiwanese GDP.
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