National Statistics, Republic of China (Taiwan)

August 18, 2023　For the second quarter of 2023, Taiwan’s real gross domestic product (GDP) increased by 1.36% from the same period of previous year according to the latest preliminary estimate, and the growth rate of 2023Q1 has been revised to -3.31%. Furthermore, the real GDP is predicted to grow 1.61% and 3.32% in 2023 and 2024, respectively.

Preliminary Estimate of Real GDP in 2023Q2

        The real GDP grew by 5.62% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar) and 1.36% on a year-on-year basis (yoy, all growth rates hereafter are on the same basis) in 2023Q2, 0.09 percentage point lower than the advance estimate.

        Meanwhile, the economic growth rate of 2023Q1 has been revised to -3.31% (formerly -2.87%).

        On the demand side, real private final consumption expanded by 12.56% in 2023Q2, mainly driven by the extended recovery of expenditures on services such as dining out, accommodation, recreation, transportation, as well as consumption on vehicles and the flourishing outbound tourism.

        Regarding gross capital formation, investment in transportation equipment grew significantly. However, investment in construction, machinery equipment and intellectual property decreased. Combining the reduction of inventory, real gross capital formation declined by 13.44%.

        In addition, real exports of goods and services dropped by 7.03%, mainly dragged by the weak global demand and prolonged inventory adjustments. Imports also fell by 7.84%.

        On the production side, the manufacturing sector decreased by 10.13% in 2023Q2, following the 12.38% decrease in the previous quarter, mainly due to the weak market demand for semiconductor, chemical material, basic metal, fabricated metal products, and machinery & equipment.

        The wholesale and retail trade sector increased by 0.91%, with the decrease in wholesale offsetting the increase in retail.

        The transportation and storage sector grew by 35.83% in 2023Q2, due to the growing number of passengers taking land and air transport.

        The financial and insurance sector increased by 2.85% in 2023Q2, following the 4.39% decline in the previous quarter.

Forecast for 2023

        Global economic growth is projected to slow down due to the demand crunch caused by the inflation, tightening monetary policies and the slow economic recovery in China. Besides, the consumer spending has shifted from goods to services after the pandemic and the prolonged inventory reduction policies exacerbated dampening final demand. According to International Monetary Fund (IMF), the dragged momentum of global demand is indicated by the world trade volume projected to grow by 2.0%. However, the continued recovery of International tourism inflows would drive travel revenue. In aggregate with services exports, real exports of goods and services will shrink by 1.74% in 2023.

        Real private consumption will grow by 7.94%. The consumption picks up after the pandemic along with strong gains in shopping, recreation, and dining out. The growth also benefits from the flourishing out-bound tourism owing to the reopening of borders, the stabilizing labor market, the government's universal cash remittance since April and pandemic-related insurance payouts.

        The continuing investment of airline companies to expand aircraft fleets to cope with the increase in overseas travel. However, enterprises’ capital expenditure tend to stay cautious due to the uncertainty toward global outlook and the effect of previous year’s high base. Real private fixed capital formation will decrease by 5.93%.

        Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 1.61% in 2023, revised downward by 0.43 percentage point from the previous forecast.

        Consumer price Index (CPI) will increase 2.14%, revised downward by 0.12 percentage point, mainly reflecting the falling raw material prices and the rise in housing rental, food away from home and entertainment expenses due to the increased demand.

Outlook for 2024

        The global economy will grow mildly and the world trade volume is projected to grow by 3.7 in 2024 according to IMF. However, the domestic capacity expansion of the advanced capacity of leading semiconductor manufacturers cope with new wave of AI applications, as well as sustaining investment in solar and offshore wind energy, all support Taiwan’s export and investment growth. Combining the contribution from domestic sector, with the recovering consumption toward regular growing course, real GDP will grow by 3.32% in 2024. CPI will gently rise by 1.58%.

Full text and tables (PDF)

【Attachment】

• Table 1-1 Gross Domestic Product and Economic Growth Rate (EXCEL) (ODF)
• Table 1-2 GDP、GNI and NI (EXCEL) (ODF)
• Table   2  Changes in Prices (EXCEL) (ODF)
• Table 3-1 Expenditures on Gross Domestic Product : At Current Prices (EXCEL) (ODF)
• Table 3-2 Expenditures on Gross Domestic Product : Composition at Current Prices (EXCEL) (ODF)
• Table 3-3 Expenditures on Gross Domestic Product : Growth Rates In Chained Volume Indexes(yoy) (EXCEL) (ODF)
• Table 3-4 Expenditures on Gross Domestic Product : Contributions to Economic Growth Rate(yoy) (EXCEL) (ODF)
• Table 4-1 Gross Domestic Product by Kind of Activity : At Current Prices (EXCEL) (ODF)
• Table 4-2 Gross Domestic Product by Kind of Activity : Composition at Current Prices (EXCEL) (ODF)
• Table 4-3 Gross Domestic Product by Kind of Activity : Growth Rates In Chained Volume Indexes(yoy) (EXCEL) (ODF)
• Table 4-4 Gross Domestic Product by Kind of Activity : Contributions to Economic Growth Rate (EXCEL) (ODF)
• Table   5  Gross National Savings and Gross Domestic Investment (EXCEL) (ODF)
• Table   6  Exports and Imports (EXCEL) (ODF)
• Table 7-1 Expenditures on GDP, Seasonally Adjusted : Chained dollars (Reference year = 2016) (EXCEL) (ODF)
• Table 7-2 Expenditures on GDP, Seasonally Adjusted : Growth Rates (EXCEL) (ODF)
• Table   8   Indicators for Private Final Consumption Expenditure (EXCEL) (ODF)
• Table   9   Indicators for Private Gross Fixed Capital Formation (EXCEL) (ODF)
• Table  10  Economic Growth Rates of Major Countries (EXCEL) (ODF)
• Table  11  Percent Changes in CPI and Food Index of Major Countries & Regions (EXCEL) (ODF)
• Table  12  Major Figures of Family Income and Expenditure (1/2) (EXCEL) (ODF)
• Table  12  Major Figures of Family Income and Expenditure (2/2) (EXCEL) (ODF)
• Table  13  The Change of Disposable Income per Household Occurred by Current Transfers between Households and Government (EXCEL) (ODF)
• Table  14  Household Income Distribution of Major Countries(Area) (EXCEL) (ODF)
• Table  15  Household Facilities and Housing in Taiwan Area (EXCEL) (ODF)
• Table  16  Government Social Transfers In Kind Effect on Income Distribution, by Income Quintile (EXCEL) (ODF)