Taiwan Economics in Brief – December 2021

Ending The Year on A High Note

Taiwan has managed to buck its severest coronavirus outbreak, coming out relatively unscathed in 2021. As proof, the island’s exports have continued to soar, reaching another record monthly high of US$40.14 billion in October. Meanwhile, the Directorate General of Budgeting, Accounting and Statistics (DGBAS) in late November raised its 2021 GDP growth forecast to 6.09%, the biggest expansion of Taiwan’s economy in over a decade.

However, supply chain bottlenecks, inflationary pressures, and the emergence of a new coronavirus variant threaten to slow some of that momentum going into the new year. Foreseeing a potential impact on consumer prices, the Executive Yuan last month moved to reduce tariffs on imports on beef and wheat and lower the commodity tax on fuel and cement.

In another indication of economic resurgence, the Ministry of Economic Affairs (MOEA) announced that retail sales in October totaled NT$323 billion (US$11.6 billion), up 6.6% from the same month last year. Wholesale trade exceeded NT$1 trillion (US$36 billion), a year-on-year increase of 14.3%, while food and beverage sales reversed their five-month contraction, growing 1.4% from October 2020. MOEA cited the improving domestic COVID-19 situation and the distribution of Quintuple Stimulus vouchers to consumers as the main drivers for the higher figures.