Taiwan Economic Forecast

Taiwan Economic Outlook

April 16, 2019

Available data for Q1 2019 points to another slowdown in the economy, which remains battered by lower demand for tech products and feeble regional dynamics. Crucially, merchandise exports contracted throughout the quarter, while the manufacturing PMI remained mired in contractionary territory. In addition, export orders—which usually lead actual exports by two to three months—contracted for a fourth consecutive month in February, suggesting further weakness ahead in the external sector. Turning to Q2, the picture will likely remain downbeat, although growth may have bottomed out already: In March, the improvement in the manufacturing PMI and strong capital goods imports both suggest renewed momentum in the industrial sector. Moreover, the possibility of a U.S.-China trade deal by the end of the quarter, although not certain, could lift trade momentum in the months ahead.

Taiwan Economic Growth

The economy is set to slow this year due largely to the tech cycle downturn, a slowdown in mainland China and the persistence of trade uncertainty. Nevertheless, low unemployment and inflation should keep private consumption growth broadly steady, while public infrastructure spending should further cushion the economic landing. Met the why particular panelists forecast GDP growth of 2.0% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.1% in 2020.

Taiwan Economy Data

20132014201520162017
Population (million)23.423.423.523.523.6
GDP per capita (USD)21,89422,71622,55922,62924,112
GDP (USD bn)512532530533575
Economic Growth (GDP, annual variation in %)2.24.00.81.42.9
Consumption (annual variation in %)2.33.42.62.32.3
Investment (annual variation in %)5.32.11.62.30.0
Industrial Production (annual variation in %)3.26.4-1.32.05.0
Retail Sales (annual variation in %)2.03.90.31.91.2
Unemployment Rate4.24.03.83.93.8
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 %)5.86.15.83.63.6
Inflation Rate (CPI, annual variation in %, eop)0.30.60.11.71.2
Inflation Rate (CPI, annual variation in %)0.81.2-0.31.40.6
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 %)11.98.1-11.411.015.0
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 %)1.62.8-11.9-1.813.2
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

ValueChangeDate
Bond Yield0.751.28 %May 13
Exchange Rate31.110.07 %May 13
Stock Market11,5580.37 %May 13

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