Taiwan Economic Outlook
June 21, 2022After growth moderated in Q1, underlying momentum is easing in Q2. Pandemic-related restrictions in China and generally less favorable global demand conditions are weighing on the external sector and manufacturing. In May, the manufacturing PMI tumbled to a near two-year low and export growth waned, while export orders fell in April. Moreover, the non-manufacturing index plunged into contractionary territory in May, as record Covid-19 cases led to greater caution among consumers and firms. However, the government’s pivot towards living with the virus will limit the fallout. Despite surging caseloads, travel restrictions are being progressively eased, with the quarantine time for visitors cut to three days in June. In other news, Taiwan and the U.S. recently launched a trade “initiative”, signaling warming ties with Washington. However, the shift falls far short of a comprehensive trade deal.
Taiwan Economic GrowthGrowth should be robust this year, thanks to the strong semiconductor industry and a tighter labor market. That said, the ongoing Covid-19 outbreak at home, higher interest rates and a weaker Chinese economy will take the edge off momentum. Rising cross-strait tensions and a potentially prolonged Chinese economic slowdown are risks. FocusEconomics panelists see GDP growing 3.5% in 2022, which is unchanged from last month’s forecast, and 3.0% in 2023.
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Taiwan Economic News
August 18, 2022
The near-term economic impact should be limited. Longer-term risks are significant due to the potential for further sanctions, shipping disruptions and war. What happened: From 4 August, China launched a series of military drills close to Taiwan, in response to Nancy Pelosi—the Speaker of the U.S. House of Representatives—visiting Taiwan earlier in the month.
August 12, 2022
GDP growth dipped to 3.0% year on year in the second quarter from 3.7% in Q1, marking the slowest increase since Q2 2020 and slightly undershooting market expectations.
August 8, 2022
Merchandise exports rose 14.2% on an annual basis in July (June: +15.2% year-on-year) amid higher exports of electronics, machinery and mineral products.
August 5, 2022
Consumer prices fell 0.03% from the previous month in July, swinging from June's 0.38% rise.
August 1, 2022
The S&P Global Manufacturing Purchasing Managers' Index (PMI) declined from 49.8 in June to 44.6 in July.