GDP: Preliminary Estimate for 2019Q3, Outlook for 2019-20, and the Comprehensive Revision of the National Accounts
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
November 29, 2019 Taiwan's real gross domestic product (GDP) grew by 2.99% from the same quarter of the previous year in 2019Q3, according to the latest preliminary estimate. The GDP is projected to grow 2.64% and 2.72% in 2019 and 2020, respectively. Meanwhile, DGBAS has released the comprehensive revision of GDP from 1951 through 2018.
Preliminary Estimate of Real GDP in 2019Q3The real GDP increased by 2.42% on a quarter-on-quarter, seasonally-adjusted annualized basis(saar), or by 2.99% on a year-on-year basis(yoy) in 2019Q3, 0.08 percentage point higher than the advance estimate.
Meanwhile, the economic growth rate of 2019Q1 and Q2 have been revised to 1.84% and 2.60%.
On the demand side, real private final consumption grew by 2.28%(yoy) in 2019Q3, higher than the 1.61% growth in the previous quarter, mainly reflecting the sales growth of cars and electric scooters, partly offset by the decrease in securities transaction fees.
Real gross capital formation contracted by 0.87%(yoy), a reversal from the 6.17% growth in the previous quarter, mainly owing to the inventory adjustments and the high base effect in the previous year, which more than offset the robust expansion of machinery and equipment expenditures.
In addition, real exports of goods and services grew by 0.33%(yoy) on the strict change of ownership basis according to the 6th Balance of Payments and International Investment Position Manual (BPM6).
On the production side, the manufacturing sector grew by 1.86% (yoy) in 2019Q3, following the 0.36% 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 financial & insurance sector increased by 2.99% and 4.83% (both yoy) respectively, after the expansion of 2.56% and 3.14% growth in the previous quarter.
Forecast for 2019Despite of the weakened global growth and the international trade conflicts, the declining inventory levels in the semiconductor sector and continuous-rising domestic production capacity driven by the reshoring of Taiwan’s overseas manufacturing companies partly offset the adverse effects. In the domestic sector, the real private consumption growth will be supported by the picking-up demand for automobiles and smartphones, in spite of the impact of the volatile financial market. In the meantime, real private fixed capital formation is expected to grow due to the sustaining investment of semiconductor manufacturing and reshoring of the overseas Taiwanese businesses.
For the whole 2019, real GDP is projected to grow 2.64%, which is revised upwardly by 0.18 percentage point from the forecast in August.
Consumer price Index (CPI) will increase 0.55% in 2019, lower by 0.12 percentage point than the previous forecast, mainly reflecting the falling raw material prices.
Outlook for 2020World trade volume is expected to grow by 3.2% in 2020, higher than 1.1% in 2019, according to the IMF’s forecast. Moreover, the increasing domestic production capacity, spurred by the semiconductor manufacturing companies for fitting the emerging demand for new technological applications, such as 5G, internet of things (IOT) and artificial intelligence, and the reshoring of Taiwan’s overseas companies, will support Taiwan’s export growth. In aggregate with services exports, real exports of goods and services will grow by 2.69% in 2020.
Regarding domestic demands, real private consumption will grow by 2.02%, supported by the stable labor market, while continuously weighed down by the aging population and low fertility rate. Real fixed capital formation will grow by 4.71%, driven by the continuing investment of semiconductor industry, the reshoring Taiwan’s overseas companies.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 2.72% in 2020. CPI will gently increase 0.71%.
Comprehensive Revision of the National AccountsThe revised estimates of GDP and related series from 1951 to 2018 are released. The revision includes the regular quinquennial revision based on the Industry and Service Census and other newly available and revised source data, as well as the implementation of the strict change of ownership principle according to the 6th Balance of Payments and International Investment Position Manual (BPM6).
As a result of the comprehensive revision, the average annual growth rate of real GDP from 2012 to 2018 is revised to 2.73%, 0.40 percent points higher than the original figure (2.33%).
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