GDP: Preliminary Estimate for 2020Q4 and Outlook for 2021
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
February 20, 2021 Taiwan’s real gross domestic product (GDP) grew by 5.09% from the same quarter of the previous year in 2020Q4, according to the latest preliminary estimate. For the whole 2020, the economic growth rate was 3.11%. Meanwhile, the real GDP is projected to grow by 4.64% in 2021.
Preliminary Estimate of Real GDP in 2020Q4 and 2020
The real GDP increased by 5.84% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), or by 5.09% on a year-on-year basis (yoy) in 2020Q4, 0.15 percentage point higher than the advance estimate.
Meanwhile, the economic growth rate of 2020Q3 has been revised to 4.26% (yoy, same as below) (formerly 3.92%). For the whole 2020, real GDP grew by 3.11%.
On the demand side, real private final consumption contracted by 1.07% in 2020Q4, better than previous three quarters, mainly reflecting that strong residents domestic consumption offset most slump of residents consumption expenditure abroad caused by COVID-19.
Regarding gross capital formation, construction investment and transportation equipment investment grew significantly, but machinery equipment investment didn’t surpass the record high in 2019Q4. Combining inventory changes, real gross capital formation contracted by 0.95%.
In addition, real exports of goods and services grew by 5.67%, mainly driven by the strong foreign demand for parts of electronic products, as well as information, communication and audio-video products. Meanwhile, imports of goods and services decreased by 2.90%.
On the production side, the manufacturing sector grew by 8.87% in 2020Q4, following the 5.56% 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 8.63% and 5.75% respectively, after the expansion of 6.75% and 6.31% growth in the previous quarter.
The transportation & storage sector and the accommodation & food service sector decreased by 16.03% and 1.97% respectively, following the 18.28% and 0.38% decline in the previous quarter.
Outlook for 2021
The capacity expansion brought by the massive investment of globally dominant semiconductor manufacturers and reshoring oversea companies timely respond to digitalization and remote demand spurred by pandemic and the emerging demand for new technological applications, such as 5G, automotive electronics, high performance computing (HPC) and IOT. As well as the rebound of the global trade, both will support Taiwan’s export in 2021. It is expected for real exports of goods and services to grow by 5.05%.
Real private consumption will grow by 3.74%, supported by the stable labor market, the wealth effect owing to the surging stock market, and the effect of a low base due to the pandemic. However, tightening government restrictions in winter for preventing COVID-19 spreading might slightly affect the consumer confidence.
Real private fixed capital formation is anticipated to grow by 3.91%. In addition to the accelerating investment of semiconductor industry and the reshoring Taiwan’s overseas companies, it is also driven by the 5G infrastructure, offshore wind energy, reconstruction of unsafe and old buildings, urban renewal, and airline industry expanding purchases of aircraft.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 4.64% in 2021, upward revised by 0.81 percentage point from the previous forecast.
Consumer price Index (CPI) will gently increase 1.33%, upward revised by 0.17 percentage point, mainly reflecting the raising crude oil and raw material prices.
Full text and tables (PDF)