GDP: Preliminary Estimate for 2021Q1 and Outlook for 2021
Contact Information : Economic Forecast Section, Department of Statistics, Directorate General of Budget, Accounting & Statistics (DGBAS)
Tel : 886-2-2380-3487
June 4, 2021 Taiwan’s real gross domestic product (GDP) have been revised to 5.15% and 3.12% for the fourth quarter and whole year of 2020. For the first quarter of 2021, the real GDP grew by 8.92%, according to the latest preliminary estimate. Besides, the real GDP is predicted to grow by 5.46% in 2021.
Preliminary Estimate of Real GDP in 2021Q1
The real GDP increased by 12.76% on a quarter-on-quarter, seasonally-adjusted annualized basis (saar), or by 8.92% on a year-on-year basis (yoy, same as below) in 2021Q1, 0.76 percentage point higher than the advance estimate.
Meanwhile, the economic growth rates have been revised to 5.15% and 3.12% for the 2020Q4 and the whole year of 2020 (formerly 5.09% and 3.11%), respectively.
Real private final consumption, expanded by 2.11% in 2021Q1, reversed from the decline of 4 consecutive quarters, mainly reflecting the strong growth of residents domestic consumption, partly due to the wealth effect of stock market.
Regarding gross capital formation, investment in machinery equipment, transportation equipment and construction grew significantly. Combining inventory changes, real gross capital formation expanded by 9.10%.
In addition, real exports of goods and services grew by 21.31%, mainly driven by the strong foreign demand for electronic parts, information, communication and audio-video products, as well as the rebound of machinery and chemical products. Imports also increased by 15.54%.
On the production side, the manufacturing sector grew by 15.84% in 2021Q1, following the 9.46% 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 11.64% and 10.33% respectively, after the expansion of 8.61% and 4.53% growth in the previous quarter.
The transportation & storage sector decreased by 5.34%, following the 15.81% decline in the previous quarter.
Outlook for 2021
The new wave of COVID-19 pandemic since mid-May has temporarily caused severe impacts on Taiwan’s economic activities. With government’s promoting control measures to tackle the rising new COVID-19 cases, the pandemic is assumed to be contained in 2021Q3, and Taiwan’s export-related manufacturing activities are less affected. The capacity expansion brought by the massive investment of globally dominant semiconductor manufacturers and reshoring oversea companies timely respond to digitalization and remote working and education demand spurred by pandemic and the emerging demand for new technological applications, such as 5G, automotive electronics, high performance computing (HPC) and IOT. Meanwhile, recently various economic and non-economic events, such as Texas-Freeze, Indian COVID-19 pandemic and Biden’s infrastructure plan, might bring or shift the new orders to Taiwan’s manufacturers. As well as the resurge of the global trade, all will support Taiwan’s export in 2021. It is expected for real exports of goods and services to grow by 15.44%.
Real private consumption is expected to grow by 2.75%, supported by the stable labor market, the emerging of the touchless service, such as online shopping and food delivery, and the effect of a low base due to the pandemic. However, banning group activity and other COVID-19 control measures might severely dampen the consumer spending in the short run.
Real private fixed capital formation is anticipated to grow by 9.10%. 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, increasing reconstruction of unsafe and old buildings, and airline companies expanding aircraft fleet.
Combining the above components as well as the public sector, Taiwan’s real GDP is projected to grow by 5.46% in 2021, upward revised by 0.82 percentage point from the previous forecast.
Consumer price Index (CPI) will increase 1.72%, upward revised by 0.39 percentage point, mainly reflecting the raising crude oil and raw material prices.
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