BOFIT Viikkokatsaus / BOFIT Weekly 2022/24
The Taiwan Statistical Bureau reports that the Taiwanese economy has not contracted in any quarter during the covid pandemic, and even posted robust annual growth in the past two years (3.4 % in 2020 and 6.5 % in 2021). A factor underpinning strong growth has been the relatively small number of covid infections in Taiwan. Case numbers began to spike in April and by the first weeks of June were averaging 69,000 new cases a day. Despite the high case numbers, however, the numbers of daily covid-related deaths are small. Most covid cases display mild symptoms, so covid restrictions have been eased considerably. The quarantine period for travellers arriving in Taiwan has just been cut from seven days to three.
Taiwan is a mid-size, open economy with exports central to its success. China, by far Taiwan’s most important export partner, accounts for 27 % of Taiwan’s exports. Microchips are its most important export product. Taiwan, which actively seeks to reduce its dependence on China, has recently boosted its exports to other countries, most notably the EU, US and ASEAN countries. Taiwan’s officials expect exports to remain strong this year – even while global and Chinese economic growth are expected to slow down. Accelerating inflation, deteriorating covid situation and the resulting decline in domestic demand, however, have dimmed Taiwan’s economic outlook for the rest of this year. At the end of May, Taiwan officials cut their GDP growth forecast for this year from 4.4 % to 3.9 %.
Taiwan’s exports have continued to grow this year.
Sources: Macrobond and BOFIT.