GDP: Preliminary Estimate for 2020Q1 and Outlook for 2020
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
May 28, 2020 Taiwan’s real gross domestic product (GDP) remained 2.71% for 2019, while slightly revised downward to 3.29% by 0.02 percentage point for the fourth quarter. For the first quarter of 2020, the real GDP grew by 1.59%, according to the latest preliminary estimate. Besides, the real GDP is predicted to grow by 1.67% in 2020.
Preliminary Estimate of Real GDP in 2020Q1
The real GDP decreased by 3.57% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), or by 1.59% on a year-on-year basis (yoy) in 2020Q1, 0.05 percentage point higher than the advance estimate.
Meanwhile, the economic growth rates have been revised to 3.29% and 2.71% for the fourth quarter and the whole year of 2019 (formerly 3.31% and 2.71%).
On the demand side, real private final consumption fell by 1.58% (yoy) in 2020Q1, a reversal from the 2.95% growth in the previous quarter, reflecting decreases in services such as restaurants and hotels, public transportations, as well as travelling, cultural, and recreational activities, due to the COVID-19 outbreak. However, the robust increases of internet retail sales, online game sales, food delivery services, e-commerce platform services, and other stay-at-home consumption, as well as brisk auto sales and financial services partly offset the above adverse effects.
Real gross capital formation expanded by 5.70% (yoy), led by the growth of the investment in transportation equipments, constructions and intellectual property products.
In addition, real exports and imports of goods and services dropped by 2.37% (yoy) and 3.95% (yoy) respectively, derived by the 3.67% and 3.45% increases in custom merchandise exports and imports adjusted on the changes of ownership basis according to BPM6, as well as the contracted services trade mainly due to sharp decreases in travel.
On the production side, the manufacturing sector grew by 6.51% (yoy) in 2020Q1, following the 1.83% 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 2.80% and 7.08% (both yoy) respectively, after the expansion of 4.96% and 6.72% growth in the previous quarter.
Outlook for 2020
The global COVID-19 pandemic has caused severe impacts on economic activities around the world. However, Taiwan’s export-related manufacturing activities are less affected since there have been no curfew or lockdown measures so far. Moreover, the dominance in semiconductor manufacturing industry and the emerging demand for new technological applications, such as 5G, internet of things (IOT) and artificial intelligence, as well as the capacity expansion of manufacturing reshoring, support Taiwan’s export growth. However, offset by weakened global demand, slumping oil price and reducing tourists,it is projected that real exports of goods and services will contract 0.70%.
Real private consumption is expected to contract 0.24% mainly owing to the impact of COVID-19. The consumers’ spending will remain weak while partly offset by the relief and stimulus measures, emerging e-commerce, food delivery services, and other stay-at-home demand.
Real private fixed capital formation is forecast to grow by 2.31%, supported by the continuing investment of semiconductor industry, 5G network construction, offshore wind energy, and reshoring investment by Taiwan’s overseas companies.
In the light of the components above as well as the public sector, Taiwan’s real GDP is projected to grow by 1.67% in 2020, revised downward by 0.70 percentage point from the previous forecast.
Consumer price Index (CPI) will decrease 0.32%, revised downward by 0.94 percentage point, mainly reflecting the declining prices of oil and raw material.
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