Economic Trends/Outlook in Taiwan

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Economic Overview

After almost five decades of sound economic management, Taiwan has managed to go from an underdeveloped agricultural island, to an economic power that is a leading producer of high-technology goods.

Taiwan has a dynamic capitalist economy in which the authorities' control of investment and foreign trade is gradually diminishing. Highly vulnerable to global economic shocks and fluctuations of the demand, the island was severely affected by the international financial crisis, with its economy contracting by -1.9% in 2009. The recovery was very dynamic in 2010, driven by an increase in exports, which are the engine of Taiwanese growth, as well as by a vast stimulus plan. Estimated at 9.3% in 2010, growth should nevertheless slow down in 2011.

Given that the Taiwanese economy has begun to grow again, the government’s priority is no longer to manage the crisis. A reform of the fiscal system has been announced, together with measures to combat inflation. The country signed a trade agreement with China, in order to avoid becoming marginalized by the ASEAN countries. In the long-term, Taiwan will have to deal with problems of population aging, low birth rate and diplomatic isolation.

The unemployment rate, which reached almost 6% in 2009, dropped to 5.3% in 2010 and should continue to decline in 2011.

Main Indicators 20092010201120122013
GDP (billions USD) 377.45430.58e503.94e545.46e590.78e
GDP (Constant Prices, Annual % Change) -1.910.8e5.4e5.2e5.1e
GDP per Capita (USD) 16,32618,458e21,410e22,967e24,653e
General Government Balance (in % of GDP) -0.81.0e1.1e1.1e1.2e
General Government Gross Debt (in % of GDP) 39.939.7e37.9e36.8e35.1e
Inflation Rate (%) -0.91.0e2.0e2.0e2.0e
Unemployment Rate (% of the Labor Force) 5.95.2e4.6e4.5e4.3e
Current Account (in % of GDP) 11.2e8.5e7.7e7.7e-

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

The agricultural sector contributes very marginally to the GNP and employs 5% of the workforce. Taiwan's main crops are rice, sugarcane, fruits and vegetables. Taiwan has limited natural resources and croplands are cultivated intensely.

The secondary sector accounts for a significant part of the GNP. Even though traditional industries such as iron and steel, chemical products and mechanics still account for almost half the industrial production, new industries are more dynamic. Taiwan is one of the world's biggest suppliers of semi-conductors, computers and mobile telephones. It is also the world's biggest supplier of computer monitors.

Services contribute about 70% to the GDP and employ slightly under 60% of the workforce.
The country, which has to deal with the continuous relocation of labor-intensive industries to countries where labor is cheaper (especially China), will have to rely on new conversions, in order to move from a high-technology based economy to a services oriented economy.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) - - -
Value Added (in % of GDP) - - -
Value Added (Annual % Change) - - -

Source: World Bank - Last Available Data.

For more detailed background on Industries in Taiwan, click here.

Indicator of Economic Freedom

Mostly free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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