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According to the preliminary estimate, Taiwan’s real gross domestic product (GDP) contracted by 0.58% in 2020Q2, compared to the same period of the previous year (yoy), and the growth rate (yoy) of 2020Q1 has been revised to 2.20%. Besides, the real GDP is predicted to grow 1.56% and 3.92% in 2020 and 2021, respectively.
Preliminary Estimate of Real GDP in 2020Q2
The real GDP decreased by 5.48% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), or contracted by 0.58% on a year-on-year basis (yoy) in 2020Q2, 0.15 percentage point higher than the advance estimate.
Meanwhile, the economic growth rate of 2020Q1 has been revised to 2.20% (formerly 1.59%).
On the demand side, real private final consumption contracted by 4.98% (yoy) in 2020Q2, lower than the 1.55% decline in the previous quarter, mainly reflecting the severely shrunk travel spendings abroad of residents, caused by the border controls under COVID-19.
Real gross fixed capital formation rose by 2.73% (yoy), primarily owing to the growth of the investment in construction as well as machinery and equipment.
In addition, real exports and imports of goods and services dropped by 3.50%(yoy) and 4.09%(yoy) respectively, derived by the 2.42% and 4.00% decreases in custom merchandise exports and imports and adjusted on the changes of ownership basis according to BPM6, as well as the contracted services trade mainly due to sharp reduction in inbound and outbound tourism.
On the production side, the manufacturing sector grew by 3.48% (yoy) in 2020Q2, following the 6.56% increase in the previous quarter, mainly due to the output expansion of semiconductor and computers, electronic & optical products.
The wholesale & retail trade sector and the financial & insurance sector increased by 0.78% and 2.16%(both yoy) respectively, after the expansion of 2.77% and 6.10% growth in the previous quarter.
The transportation & storage sector and the accommodation & food service sector, strongly hit by the COVID-19 pandemic, decreased by 23.73% and 15.20%(both yoy) respectively, following the 10.17% and 10.90% decline in the previous quarter.
Forecast for 2020
The global COVID-19 pandemic has caused severe impacts on economic activities around the world. However, Taiwan’s manufacturing activities are less affected. Moreover, the high tech capacity expansion respond to the emerging demand for new technological applications, such as 5G and high performance computing (HPC), support Taiwan’s export growth. However, offset by weakened global demand, slumping raw material prices and reducing tourists, it is projected that real exports of goods and services will contract 2.74%.
Real private consumption is expected to contract 1.44%, mainly owing to the impact of COVID-19 on the travel expenditure abroad by residents, due to the border controls, while partly offset by emerging e-commerce and stay-at-home demand. The government’s relief and stimulus measures help to encourage consumption sentiment and boost the domestic economy.
Real private fixed capital formation is forecast to grow by 2.41%, supported by the continuing investment of semiconductor industry, reshoring of Taiwan’s overseas companies, 5G network construction, offshore wind energy, reconstruction of unsafe and old buildings, and urban renewal.
Combining the components above as well as the public sector, Taiwan’s real GDP is projected to grow by 1.56% in 2020, revised downward by 0.11 percentage point from the previous forecast.
Consumer price Index (CPI) will decrease 0.19%, revised upward by 0.13 percentage point, mainly reflecting the decline convergence in oil and raw material prices.
Outlook for 2021
In 2021, the global economy will rebound from the deep decline in 2020, and the world trade volume is expected to grow by 8.0%, according to International Monetary Fund (IMF). Moreover, rising domestic production capacity, spurred by the continuing investment of dominance in semiconductor manufacturing and reshoring companies, will support Taiwan’s export and investment growth. Combining the contribution from domestic sector, as the recovering consumption, real GDP will grow by 3.92% in 2021. CPI will gently rise by 1.12%.
Full text and tables (PDF)
- Table 1-1 Gross Domestic Product and Economic Growth Rate (EXCEL) (ODF)
- Table 1-2 GDP、GNI and NI (EXCEL) (ODF)
- Table 2 Changes in Prices (EXCEL) (ODF)
- Table 3-1 Expenditures on Gross Domestic Product : At Current Prices (EXCEL) (ODF)
- Table 3-2 Expenditures on Gross Domestic Product : Composition at Current Prices (EXCEL) (ODF)
- Table 3-3 Expenditures on Gross Domestic Product : Growth Rates In Chained Volume Indexes(yoy) (EXCEL) (ODF)
- Table 3-4 Expenditures on Gross Domestic Product : Contributions to Economic Growth Rate(yoy) (EXCEL) (ODF)
- Table 4-1 Gross Domestic Product by Kind of Activity : At Current Prices (EXCEL) (ODF)
- Table 4-2 Gross Domestic Product by Kind of Activity : Composition at Current Prices (EXCEL) (ODF)
- Table 4-3 Gross Domestic Product by Kind of Activity : Growth Rates In Chained Volume Indexes(yoy) (EXCEL) (ODF)
- Table 4-4 Gross Domestic Product by Kind of Activity : Contributions to Economic Growth Rate (EXCEL) (ODF)
- Table 5 Gross National Savings and Gross Domestic Investment (EXCEL) (ODF)
- Table 6 Exports and Imports (EXCEL) (ODF)
- Table 7-1 Expenditures on GDP, Seasonally Adjusted : Chained dollars (Reference year = 2016) (EXCEL) (ODF)
- Table 7-2 Expenditures on GDP, Seasonally Adjusted : Growth Rates (EXCEL) (ODF)
- Table 8 Indicators for Private Final Consumption Expenditure (EXCEL) (ODF)
- Table 9 Indicators for Private Gross Fixed Capital Formation (EXCEL) (ODF)
- Table 10 Economic Growth Rates of Major Countries (EXCEL) (ODF)
- Table 11 The Changes of Consumer Price Indices for Major Countries (EXCEL) (ODF)
- Table 12 Summary of Earning and Productivity Statistics in Taiwan Area (EXCEL) (ODF)
- Table 13 Major Figures of Family Income and Expenditure (1/2) (EXCEL) (ODF)
- Table 13 Major Figures of Family Income and Expenditure (2/2) (EXCEL) (ODF)
- Table 14 The Change of Disposable Income per Household Occurred by Current Transfers between Households and Government (EXCEL) (ODF)
- Table 15 Household Income Distribution of Major Countries(Area) (EXCEL) (ODF)
- Table 16 Household Facilities and Housing in Taiwan Area (EXCEL) (ODF)
- Table 17 Government Social Transfers In Kind Effect on Income Distribution, by Income Quintile (EXCEL) (ODF)