Taiwan Economy - 2022

GEOGRAPHICAL NAMES 

Economic overview

Taiwan has a dynamic capitalist economy that is driven largely by industrial manufacturing, and especially exports of electronics, machinery, and petrochemicals. This heavy dependence on exports exposes the economy to fluctuations in global demand. Taiwan's diplomatic isolation, low birth rate, rapidly aging population, and increasing competition from China and other Asia Pacific markets are other major long-term challenges.

 

Following the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand - Taipei’s first-ever with a country with which it does not maintain diplomatic relations - and, in November of that year, inked a trade pact with Singapore. However, follow-on components of the ECFA, including a signed agreement on trade in services and negotiations on trade in goods and dispute resolution, have stalled. In early 2014, the government bowed to public demand and proposed a new law governing the oversight of cross-Strait agreements, before any additional deals with China are implemented; the legislature has yet to vote on such legislation, leaving the future of ECFA uncertain. President TSAI since taking office in May 2016 has promoted greater economic integration with South and Southeast Asia through the New Southbound Policy initiative and has also expressed interest in Taiwan joining the Trans-Pacific Partnership as well as bilateral trade deals with partners such as the US. These overtures have likely played a role in increasing Taiwan’s total exports, which rose 11% during the first half of 2017, buoyed by strong demand for semiconductors.

 

Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025.

 

The island runs a trade surplus with many economies, including China and the US, and its foreign reserves are the world's fifth largest, behind those of China, Japan, Saudi Arabia, and Switzerland. In 2006, China overtook the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment and has also secured greater market access for its investors on the mainland. In August 2012, the Taiwan Central Bank signed a memorandum of understanding (MOU) on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese renminbi (RMB) and the New Taiwan dollar across the Strait, which has helped Taiwan develop into a local RMB hub.

 

Closer economic links with the mainland bring opportunities for Taiwan’s economy but also pose challenges as political differences remain unresolved and China’s economic growth is slowing. President TSAI’s administration has made little progress on the domestic economic issues that loomed large when she was elected, including concerns about stagnant wages, high housing prices, youth unemployment, job security, and financial security in retirement. TSAI has made more progress on boosting trade with South and Southeast Asia, which may help insulate Taiwan’s economy from a fall in mainland demand should China’s growth slow in 2018.

Real GDP (purchasing power parity)

$1,143,277,000,000 (2019 est.)

$1,113,126,000,000 (2018 est.)

$1,083,384,000,000 (2017 est.)

note: data are in 2010 dollars

Real GDP growth rate

2.71% (2019 est.)

2.75% (2018 est.)

3.31% (2017 est.)

Real GDP per capita

$24,502 (2018 est.)

$50,500 (2017 est.)

$23,865 (2017 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$611.391 billion (2019 est.)

Inflation rate (consumer prices)

0.5% (2019 est.)

1.3% (2018 est.)

0.6% (2017 est.)

Credit ratings

Fitch rating: AA- (2016)

Moody's rating: Aa3 (1994)

Standard & Poors rating: AA- (2002)

note: The year refers to the year in which the current credit rating was first obtained.

GDP - composition, by sector of origin

agriculture: 1.8% (2017 est.)

industry: 36% (2017 est.)

services: 62.1% (2017 est.)

GDP - composition, by end use

household consumption: 53% (2017 est.)

government consumption: 14.1% (2017 est.)

investment in fixed capital: 20.5% (2017 est.)

investment in inventories: -0.2% (2017 est.)

exports of goods and services: 65.2% (2017 est.)

imports of goods and services: -52.6% (2017 est.)

Agricultural products

rice, vegetables, pork, cabbages, poultry, sugar cane, milk, eggs, pineapples, tropical fruit

Industries

electronics, communications and information technology products, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals

Industrial production growth rate

3.9% (2017 est.)

Labor force

11.498 million (2020 est.)

Labor force - by occupation

agriculture: 4.9%

industry: 35.9%

services: 59.2% (2016 est.)

Unemployment rate

3.73% (2019 est.)

3.69% (2018 est.)

Population below poverty line

1.5% (2012 est.)

Gini Index coefficient - distribution of family income

33.6 (2014)

32.6 (2000)

Household income or consumption by percentage share

lowest 10%: 6.4% (2010)

highest 10%: 40.3% (2010)

Budget

revenues: 91.62 billion (2017 est.)

expenditures: 92.03 billion (2017 est.)

Budget surplus (+) or deficit (-)

-0.1% (of GDP) (2017 est.)

Public debt

35.7% of GDP (2017 est.)

36.2% of GDP (2016 est.)

note: data for central government

Taxes and other revenues

16% (of GDP) (2017 est.)

Fiscal year

calendar year

Current account balance

$65.173 billion (2019 est.)

$70.843 billion (2018 est.)

Exports

$388.49 billion (2019 est.)

$383.484 billion (2018 est.)

$382.736 billion (2017 est.)

Exports - partners

China 26%, United States 14%, Hong Kong 12%, Japan 7%, Singapore 7%, South Korea 5% (2019)

Exports - commodities

integrated circuits, office machinery/parts, computers, refined petroleum, liquid crystal displays (2019)

Imports

$308.744 billion (2019 est.)

$305.428 billion (2018 est.)

$303.067 billion (2017 est.)

Imports - partners

China 21%, Japan 16%, United States 11%, South Korea 6% (2019)

Imports - commodities

integrated circuits, crude petroleum, photography equipment, natural gas, refined petroleum (2019)

Reserves of foreign exchange and gold

$456.7 billion (31 December 2017 est.)

$439 billion (31 December 2016 est.)

Debt - external

$189.684 billion (2019 est.)

$196.276 billion (2018 est.)

Exchange rates

New Taiwan dollars (TWD) per US dollar -

28.211 (2020 est.)

30.472 (2019 est.)

30.8395 (2018 est.)

31.911 (2014 est.)

30.363 (2013 est.)

NOTE: The information regarding Taiwan on this page is re-published from the 2022 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Taiwan 2022 information contained here. All suggestions for corrections of any errors about Taiwan 2022 should be addressed to the CIA or the source cited on each page.