GDP: Preliminary Estimate for 2018Q4 and Outlook for 2019
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
Taiwan's real gross domestic product (GDP) grew by 1.78% from the same quarter of the previous year in 2018Q4, according to the latest preliminary estimate. For the whole 2018, the economic growth rate was 2.63%. Meanwhile, the real GDP is projected to grow by 2.27% in 2019.
Preliminary Estimate of Real GDP in 2018Q4 and 2018
In 2018Q4, the real GDP increased 1.50% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), and grew by 1.78% on a year-on-year basis (yoy), 0.02 percentage point higher than the advance estimate.
Meanwhile, the economic growth rate of 2018Q3 has been revised to 2.38% (formerly 2.27%). For the whole 2018, real GDP grew by 2.63%.
On the demand side, real private final consumption expanded by 1.67% (yoy) in 2018Q4, close to the 1.69% growth in the previous quarter, mainly for the sake of a decrease in sales of information and communications equipment and electrical household appliance, and the slump in financial services. However, the spending of local elections and referendums offset the reduction.
Real gross capital formation expanded by 9.42% (yoy), lessening from the 17.33% growth in the previous quarter, chiefly owing to decreased investment in machinery and equipment.
Meanwhile, real exports of goods and services grew by 1.29% (yoy), mainly due to the deceleration of global economic growth, and the high base of 2017Q4. Imports also increased by 4.29% (yoy).
On the production side, the manufacturing sector grew by 2.53% (yoy) in 2018Q4, following the 2.63% increase in the previous quarter, mainly due to the output expansion of computers, electronic & optical products.
The wholesale & retail trade sector and the transportation & storage sector increased by 1.43% and 3.66% (both yoy) respectively, slower than the 3.55% and 5.17% growth in the previous quarter.
Outlook for 2019
Taiwan's exports are expected to grow at a moderate pace in 2019, mainly due to the slowdown of the global economic growth, weakening global demand for tech devices (particularly smartphones), inventory adjustments in semiconductor industry and high base effect of prior year. Coupling with services exports, real exports of goods and services will grow by 2.25%.
Real private consumption will grow by 2.18%, supported by the wage lift, the individual income tax cuts, and the subsidy program for domestic travel and replacement of energy-efficient appliances, but continue to be dampened by the declining demographic dividend and subject to the economic uncertainty and volatile financial market.
Real private fixed capital formation is anticipated to increase by 3.62%, on account of the continuing investment of semiconductor manufacturing and the government’s measures to ameliorate investment environment, however the uncertain economic prospects weaken confidence of businesses which may be discreet with their investment plans.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 2.27% in 2019, revised downward 0.14 percentage point from the previous forecast.
CPI will gently increase 0.73% and has been revised downward 0.23 percentage point, mainly reflecting the declining oil prices and the end of the impact for lifting tobacco tax.
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