Economic Outline

Economic Indicators

In 2020-2021, Taiwan bucked global trends by maintaining stable macroeconomic performance amid the Covid-19 pandemic: economic growth surged from an average of 2.8% yearly in 2016-2018 to 4.5% in 2019-2021, propelled by increased manufacturing production and exports, along with supportive monetary and fiscal policies, alongside rising investment rates. After growing an estimated 1.3% in 2023, economic activity accelerated to 4.3% in 2024, the highest rate in three years, driven by stronger-than-expected private investment and a surge in high-tech exports (official governmental figures). According to the IMF, growth is anticipated to moderate to 2.7% this year and 2.6% in 2026, as robust exports of AI-related products and investment activities are expected to sustain growth, balancing weak demand in traditional manufacturing industries.

Taiwan maintains a solid external financial position, characterized by significant current account surpluses averaging between 10% and 15% of GDP over the past decade. After recording a budget deficit of 0.8% of GDP in 2024, the 2025 Budget is notably ambitious, with a nearly 20% increase from the preceding year. Social welfare will be the largest expenditure, followed by education, science, and culture. Funding for five priority industries—semiconductors, AI, military, security, and next-gen communications—will rise by 40%. The budget is expected to be nearly balanced in 2025. However, geopolitical tensions could strain finances in the second half, with slower export growth and new fiscal measures to support the economy. Military spending, currently at 2.5% of GDP, should remain high. Public debt – at 26.4% in 2024, from 29.1% one year earlier - is set to decline further (to 22.2% by 2026), remaining low by global standards (IMF). Inflation decelerated from 2.5% in 2023 to 2.1% last year. By 2025, inflation is expected to fall below the Central Bank of the Republic of China's (CBC) 2% target.

Official governmental figures show that Taiwan's unemployment rate fell to 3.38% in 2024, the lowest since 2000, down 0.1 percentage points from 2023. By education level, the jobless rate was highest among university graduates at 4.52%, followed by high/junior high school graduates at 3.21% and vocational college graduates at 2.68%. By age, unemployment was highest among those aged 20-24 at 11.62%, driven by first-time jobseekers, followed by 15-19-year-olds at 8.58%, 25-29-year-olds at 5.87%, and 30-34-year-olds at 3.36%. Overall, the number of individuals in employment hit about 11.60 million in 2024. Taiwan’s GDP per capita (PPP) was estimated at USD 82,615 in 2024 by the IMF, one of the highest ratios globally.

Any Comment About This Content? Report It to Us.