Taiwan Economics in Brief – November 2020

Sustained Optimism on 2020 Growth

National Development Council (NDC) Minister Kung Ming-hsin said that based on recent economic data, Taiwan’s GDP growth rate for 2020 is expected to exceed the government’s August forecast of 1.56%. The more optimistic outlook contrasts with the International Monetary Fund’s prediction that the island would experience zero growth this year, although that is an improvement from its earlier estimate of a 4% contraction.

Meanwhile, the NDC’s business monitor in September flashed “green” for the second month in a row, based on steady growth as the total score in the index continued to climb. The Council cited improved industrial production, manufacturing sales, and business sentiment as likely factors in the increased score. Whatever the reason, all signs point to a relatively robust year for Taiwan’s economy despite the COVID-19 pandemic.

The Taiwan Institute for Economic Research (TIER) reported that all three of its composite indexes continued to rise in September even as the spike in COVID-19 cases in Europe creates uncertainties for the global economy. TIER noted that exports in September increased by 9.36% year-on-year, while imports decreased by 5.44% from September 2019. Overall trade stood at US$40.31 billion, a 22.87% jump from the same time last year.

Retail sales in September rose 3% year-on-year, according to the Ministry of Economic Affairs (MOEA), which attributed the increase to Ghost Month promotions offered by supermarket chains and other retail outlets during that period. The MOEA also reported a 10.75% rise in its industrial production index for September – the eighth consecutive month of increase – citing strong demand for tech hardware.

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