GDP: Preliminary Estimate for 2018Q3 and Outlook for 2018-19
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
November 30, 2018 Taiwan's real gross domestic product (GDP) grew by 2.27% from the same quarter of the previous year in 2018Q3, according to the latest preliminary estimate. The GDP is projected to grow 2.66% and 2.41% in 2018 and 2019, respectively.
Preliminary Estimate of Real GDP in 2018Q3In 2018Q3, the real GDP increased 1.52% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), and grew by 2.27% on a year-on-year basis (yoy), 0.01 percentage point lower than the advance estimate.
On the demand side, real private final consumption grew by 1.80% (yoy) in 2018Q3, moderating from the 2.29% growth in the previous quarter, mainly on account of the decrease of car sales and the slowdown in the expansion on traveling and financial services.
Real gross capital formation grew by 16.84% (yoy), a reversal from the 2.04% decline in the previous quarter, mainly reflecting the increase in machinery and equipment investment.
Meanwhile, real exports of goods and services grew by 1.21% (yoy), decelerating from the 6.33% growth in the previous quarter, due to the high base effect of last year. Imports also increased by 4.64% (yoy).
On the production side, the manufacturing sector grew by 2.34% (yoy) in 2018Q3, following the 5.03% increase in the previous quarter, mainly due to the output expansion of semiconductor and computers, electronic & optical products.
The wholesale & retail trade sector and the transportation & storage sector increased by 3.55% and 3.85% (both yoy) respectively, after the expansion of 4.56% and 4.27% growth in the previous quarter.
Meanwhile, based on the annual revision estimates, the economic growth rates of 2018Q1 and Q2 were revised to 3.15% and 3.29% (formerly 3.10% and 3.30%).
Forecast for 2018Taiwan's exports are expected to grow at a moderate pace in 2018Q4, due to the deceleration of the economic growth for major trading partners and high base effect of prior year. In the domestic sector, the real private consumption growth will be dampened due to the volatility of the stock and financial market and the following consumer sentiment decline, in spite of the continuing improvement of labor market. In the meantime, private fixed capital formation is anticipated to remain solid, owing to continuous-growing construction investment. However, deferred capital expenditures in semiconductor industry may offset the growth momentum.
For the whole 2018, real GDP is projected to grow 2.66%, which is revised downwardly by 0.03 percentage point from the forecast in August.
Consumer price Index (CPI) will increase 1.43% in 2018, lower by 0.09 percentage point than the previous forecast, mainly because of food prices tamed by the stable weather conditions and the government's fuel price stabilization mechanism.
Outlook for 2019Despite of the competitive advantage in semiconductor industry, together with the emerging demand for new technological applications, such as internet of things (IOT), automotive electronics, and artificial intelligence, growths slowdown in neighboring trading partners and worldwide weaker demand for mobile phone would drag the export growth. Coupling with services exports, real exports of goods and services will grow by 3.06% in 2019.
Regarding domestic demands, real private consumption, supported by the wage lift and the individual income tax cuts, will grow by 2.23%. Real fixed capital formation, driven by the continuing investment of semiconductor industry and government’s promoting measures on business investments and forward-looking infrastructure investment program, will grow by 5.40%.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 2.41% in 2019. CPI will gently increase 0.96%.
Revision for the 2016 and 2017 National AccountsBase on the newly available source data, DGBAS released the annual revision of the 2016 and 2017 national accounts. The yearly GDP growth rates have been revised to 1.51% (original 1.41%) for 2016 and 3.08% (2.89%) for 2017.
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