Taiwan Economics in Brief – November 2021

Steep Growth Rate Projected For 2021

The Directorate-General of Budgeting, Accounting and Statistics has forecast economic growth of 5.88% for this year, which would be the highest growth rate Taiwan has achieved in 11 years. The private Chung-Hua Institution for Economic Research (CIER) announced a forecast of just a slightly lower 5.84%.

In another strong signal of economic recovery following the stabilization of the local COVID-19 situation, Taiwan’s tax revenue in September grew 13.1% from last year to NT$302 billion (US$10.73 billion). Revenue increased by 40% year-on-year from personal income tax, 20.5% from corporate income tax, and 5.4% from business tax. In the first nine months of the year, total tax revenue logged a 22% gain, reaching NT$2.24 trillion. 

The Ministry of Labor’s Minimum Wage Review Committee on October 8 announced a 5.21% raise in Taiwan’s monthly and hourly minimum wage, effective January 1, 2022. The minimum monthly salary will increase from NT$24,000 (US$855) to NT$25,250 (US$908), and the hourly wage from NT$160 (US$5.75) to NT$168 (US$6.04). This marks the sixth consecutive year of increase in the minimum wage under the Tsai administration.

Due to strained global supply chains and increased costs internationally, the Consumer Price Index (CPI) rose 2.63% year-on-year in September, its biggest increase in over eight years. Chen Kai-yu, founder of the point-of-sale startup iCHEF, told the Chinese-language CTWant that as a result, nearly 30% of Taiwan food vendors might raise menu prices by up to 10%. On October 25, Wowprime Corp., which operates over 420 dining outlets around Taiwan, increased menu prices by about 5% at all its establishments. Over the past three months, restaurants have faced sharp hikes in food costs and are preparing for the impact of next year’s minimum wage hike.

As elsewhere, oil prices are increasing in Taiwan, while natural gas and coal prices are up following power shortages in Asia. State-owned petroleum firm CPC Corp., Taiwan announced on October 25 that gasoline prices would rise by NT$0.6 per liter and diesel prices by NT$0.7, marking the fourth consecutive week of rising gas prices. The new cost of NT$31.6 per liter for 95-octane unleaded gasoline is the highest in nearly three years.