Taiwan, China flag Taiwan, China: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Taiwan was facing a relatively low economic growth at 3% back in 2019 due to lower demand from trade partners and  trade tensions between China and the United States. In the context of the COVID-19 pandemic, the country registered a 3.1% GDP growth in 2020, one of the best results in the world, and 5.9% in 2021 (IMF, October 2021). Taiwan enjoys a good financial position, is the 4th electronic producer in the world and support R&D. According to the latest IMF forecasts, growth is expected to return  to 3.3% in 2022, subject to the post-pandemic global economy recovery.

According to the latest IMF estimates, public debt closed at 27.2% of GDP in 2021 and is expected to decrease in 2022 and 2022 with 22.8% and 18.2% respectively. The budget was in deficit at -1.9% in 2019 and increased due to the COVID-19 pandemic to -3.2% in 2020 but came back to +0.3% in 2021. It is expected to increase in the following years to 1.4% in 2022 and 2% in 2023. Inflation remained low at 1.6% in 2021. It should stay at this level with 1.5% and 1.4% in 2022 and 2023 (IMF, October 2021). Taiwan industries are affected by the international trade tensions, which include electronics (40% of Taiwan's exports), machinery, and chemicals. Chinese restrictions on travel from mainland China to Taiwan have also affected this sector. Other economic challenges include massive relocations that weaken industrial employment, uncompetitive service sector, insufficient infrastructure, and diplomatic isolation. Nevertheless, growth will be aided by infrastructure spending in healthcare and energy. The Infrastructure Development Plan will also modernise the rail network and water distribution. While budget deficits are expected, taxes were increase on income and financial transactions. Most public debt is domestic and owed in New Taiwanese dollars.

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic, even though Taiwan had the pandemic well in hand from the start thanks to early and effective prevention. The government’s approach to the COVID-19 pandemic was among the world’s most successful. Avoiding any abusive restrictions, officials focused on contact tracing and quarantines for overseas travelers, and provided accurate and timely information to the public. Despite an surge in COVID-19 in 2021, growth was resilient, mainly thanks to its export-oriented manufacturing sector, as global demand, especially for electronics, was accelerating. The unemployment rate remained steady at 3.8%, virtually unchanged compared to 2020 and 2019 (3.9% and 3.7% respectively) and it is expected to remain at this level (3.6%) in 2022 and 2023 (IMF, October 2021). Social challenges include an ageing population, low birth rates, and a tense political agenda focusing on reunification with mainland China.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 669.25774.73828.66858.97901.62
GDP (Constant Prices, Annual % Change) 3.46.63.32.82.1
GDP per Capita (USD) 2833353638
General Government Balance (in % of GDP) -2.7-0.7-0.5-0.5-0.5
General Government Gross Debt (in % of GDP) 32.628.424.122.120.2
Inflation Rate (%) -0.22.03.12.21.4
Unemployment Rate (% of the Labour Force) 3.94.03.63.63.6
Current Account (billions USD) 94.80114.68122.64109.09103.72
Current Account (in % of GDP) 14.214.814.812.711.5

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
New Taiwan Dollar (TWD) - Average Annual Exchange Rate For 1 GBP n/an/an/an/an/a

2015

 

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Latest Update: November 2022

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