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August 13, 2021 According to the preliminary estimate, Taiwan’s real gross domestic product (GDP) increased by 7.43% in 2021Q2, compared to the same period of the previous year, and the growth rate of 2021Q1 has been revised to 9.27%. Besides, the real GDP is predicted to grow 5.88% and 3.69% in 2021 and 2022, respectively.
Preliminary Estimate of Real GDP in 2021Q2
The real GDP contracted by 4.21% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), or increased by 7.43% on a year-on-year basis (yoy, same as below) in 2021Q2, 0.04 percentage point lower than the advance estimate.
Meanwhile, the economic growth rate of 2021Q1 has been revised to 9.27% (formerly 8.92%).
Real private final consumption fell by 0.41% in 2021Q2, a reversal from the 2.27% growth in the previous quarter, mainly reflecting a slump in consumption expenditure caused by COVID-19 local outbreaks. Nationwide Level 3 epidemic alert from mid-May led to the contraction in service consumptions such as restaurants and hotels, public transportations, as well as some commodity consumptions such as cars and clothing. Online shopping, delivery services, and other equipment expenditures for work/study-from-home partly offset the decline.
Regarding gross capital formation, investment in machinery equipment, transportation equipment and construction grew significantly. Combining inventory changes, real gross capital formation expanded by 8.56%.
In addition, real exports of goods and services grew by 22.62%, mainly driven by the strong foreign demand for electronic parts and ICT products, as well as the significant growth of traditional products, such as steel, chemistry product. Imports also increased by 17.46%.
On the production side, the manufacturing sector grew by 16.38% in 2021Q2, following the 15.87% increase in the previous quarter, mainly due to the output expansion of semiconductor, fabricated metal products, and machinery & equipment.
The wholesale & retail trade sector and the financial & insurance sector increased by 5.96% and 12.73% respectively, after the expansion of 11.64% and 10.47% growth in the previous quarter.
Despite of a sharp decline of passengers transportation caused by COVID-19 pandemic, however, the freight transportation increased with the growth of manufacturing, the transportation and storage sector grew by 1.52%, following the 4.99% decline in the previous quarter.
Forecast for 2021
The capacity expansion brought by the massive investment of semiconductor manufacturers and reshoring oversea companies timely respond to digitalization and remote demand spurred by the pandemic, and emerging demand for new technological applications, such as 5G, automotive electronics, high performance computing (HPC) and internet of things (IOT). As well as the traditional commodities rebound associated with the recovering global economy, both will support Taiwan’s export in the second half of 2021. Although few of factories suspends temporarily due to the pandemic, Taiwan’s manufacturing activities are almost unaffected. It is expected for real exports of goods and services to grow by 17.93% in 2021.
As COVID-19 local pandemic is controlled, consumer spending will pick up amid restrictions easing and the introducing of government’s relief and stimulus measures. Real private consumption is expected to grow by 1.36%, mainly owing to the impact of local pandemic on spending, due to banning social gathering and other COVID-19 control restrictions, while partly offset by the emerging of the touchless service.
Real private fixed capital formation is anticipated to grow by 11.89%. In addition to the accelerating investment of semiconductor industry and the reshoring Taiwan’s overseas companies, it is also driven by the 5G infrastructure, offshore wind energy, as well as airline companies and container shipping companies expanding fleet capacity.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 5.88% in 2021, upward revised by 0.42 percentage point from the previous forecast.
Consumer price Index (CPI) will increase 1.74%, upward revised by 0.02 percentage point, mainly reflecting the raising gasoline and food prices.
Outlook for 2022
The global economy will keep growing, and the world trade volume is projected to continue growing by 7.0% in 2022, according to International Monetary Fund (IMF). Moreover, enlarging domestic production capacity, spurred by the supply chain of semiconductor industry and reshoring companies, will support Taiwan’s export and investment growth. Combining the contribution from domestic sector, with the recovering consumption, real GDP will grow by 3.69% in 2022. CPI will gently rise by 0.89%.
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)