Taiwan Economics in Brief – March 2021

By Austin Babb and Jason Wu

Forecasts Rise,  As Do Exports

Prospects continue to look positive for Taiwan’s economy in 2021. The National Development Council (NDC) forecast in mid-February that Taiwan’s GDP could expand by more than 4% this year. A few days later, the Directorate-General of Budget, Accounting and Statistics (DGBAS) upgraded its own GDP growth forecast from 3.83% to a much higher 4.64%. As factors in their revised forecasts, the two organizations cited Taiwan’s successful pandemic management, as well as strengthened exports, private investment, and consumer spending in 2021.

Ministry of Finance statistics show a 36.8% spike in exports in January 2021 compared to the same month last year. The MOF states that the substantial increase can be linked to the recent surge in demand for smartphones, laptops, TVs, and other technology products. Export orders in January rose 49.3% year-on-year to US$52.72 billion, according to the Ministry of Economic Affairs (MOEA). The ministry said that the large differential was due in part to the Lunar New Year holiday falling in January last year, while this year’s break took place in February.

The TAIEX (Taiwan Capitalization Weighted Stock Market) advanced 560 points after the Lunar New Year break. Dealers note that the market is playing catch-up with robust gains in the U.S. stock market, undergirded by the strong performance of Taiwan Semiconductor Manufacturing Co. (TSMC) during the weeklong holiday.

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