Asia Regional Integration Center

GDP growth achieved a 3-year high of 2.9% in 2017, the rate doubling annually for a second time since 2015 boosted by higher exports and private consumption. Supported by stronger global trade, particularly a boost in demand for consumer electronics, merchandise exports reversed shrinkage by 1.8% in 2016 to increase by 13.2% in 2017, the highest growth rate since 2010. Net exports, having subtracted from growth in the previous 2 years, contributed 2.0 percentage points to economic growth in 2017. Private consumption increased as a tightening labor market lowered the unemployment rate to 3.8%, pushed wages up by 2.7%, and, with the help of higher asset prices, resulted to a positive consumer outlook. Despite lower government consumption in 2017, total consumption contributed 1.1 percentage points to growth. Industry added another 1.3 points, while agriculture contributed only 0.1 points despite being the fastest-growing sector.

As exports have held up despite global trade friction, growth forecast is upgraded from 2.9% to 3%. Consumer confidence in Taipei,China strengthened in August 2018 relative to a year earlier but was down from the start of this year. Accommodative monetary policy and wages driven higher in a tightening labor market continue to support household spending.