Investment in Taiwan
Taiwan - Investment
Growth accelerates in Q4 2019
The economy expanded 3.3% in the fourth quarter compared to the same quarter a year earlier, according to a second GDP release. This was marginally lower than the preliminary 3.4% reading but above the 3.0% expansion recorded in the third quarter. On a seasonally-adjusted, quarter-on-quarter basis, growth accelerated to a revised 1.9% in Q4 (previously reported: +1.7% qoq), up from 0.6% in Q3 and marking the strongest expansion since Q1 2012. Meanwhile, full-year growth clocked in at 2.7% in 2019, marginally below 2018’s 2.8% expansion but matching the estimate from the preliminary release.
On the domestic front, gross capital formation spearheaded the upturn, soaring 15.0% in Q4 on a year-on-year basis (preliminary estimate: +10.7% year-on-year; Q3: +3.7% yoy). This was likely driven by a reshoring of capital by Taiwanese companies, spurred by government measures that aim to attract overseas investment. That said, consumption metrics were slightly less upbeat: Private consumption increased 2.6% in Q4 (preliminary estimate: +2.9% yoy), inching up from 2.5% in the prior quarter, while government spending slowed to 2.0% (preliminary estimate: +1.9% yoy), from 3.8% in Q3.
In contrast, the external sector’s overall contribution to growth deteriorated in the final quarter. Although export growth accelerated to 2.6% year-on-year (preliminary estimate: +2.3% yoy), having flatlined in Q3, import growth hit 4.4% in Q4 (preliminary estimate: +4.3% yoy) after contracting 2.6% in the previous quarter.
Looking ahead, the re-election of President Tsai in January signals a continuation of pro-growth policies that should support the economy. Strong demand for semi-conductor technologies is seen bolstering exports and supporting a projected rebound in manufacturing output, although external headwinds such as the development of U.S.-China trade policies and the recent coronavirus outbreak provide major risks to the outlook.
FocusEconomics Consensus Forecast panelists project GDP will grow 2.3% in 2020, which is up 0.2 percentage points from last month’s forecast. For 2021, the panel estimates that economic activity will increase 2.2%.
Taiwan - Investment Data
|Investment (annual variation in %)||2.1||2.7||3.4||-0.3||3.0|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.69||1.28 %||Dec 31|
|Exchange Rate||29.91||0.07 %||Jan 01|
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March 23, 2020
Industrial output flew 20.3% higher in February compared to the same month a year earlier, contrasting the revised 2.1% decrease recorded in January (previously reported: -1.5% year-on-year). The stellar reading in February was helped in no small part by a sizeable base effect, likely influenced by differences in dates of the Chinese Lunar Holiday between this year and the last, as well as being aided by the leap year effect this year.
March 19, 2020
At its monetary policy meeting on 19 March, the Board of Directors of Taiwan’s Central Bank unanimously decided to lower the discount rate by 0.25 percentage points to a record low of 1.125%.
March 9, 2020
Merchandise exports expanded 24.9% in annual terms in February, contrasting January’s 7.5% contraction.
March 6, 2020
Consumer prices decreased 1.08% in February compared with the previous month, contrasting January’s revised 0.61% increase (previously reported: +0.59%).
March 2, 2020
The manufacturing Purchasing Managers’ Index (PMI), reported by IHS Markit, fell to 49.9 in February from 51.8 in January.