Last year’s growth economy was driven by the hybrid working setup, recovering consumer confidence, and global demand for chips
According to Reuters, Taiwan’s economy grew exponentially last year. This was the fastest it has increased in a decade. Last year, the initial GDP was 6.28 percent, a 3.17 percent increase from 2020’s 3.11 percent.
This was all thanks to strong tech exports, which supported the hybrid working setup, as well as the recovering consumer confidence, and global demand for chips. Because of these factors, last year’s exports rose to a decade high of 29.4 percent.
The global demand for information and communications technology products increased as a result of pandemic travel restrictions. Taiwan’s exports of various products such as metals, plastics, chemicals, and textiles significantly increased after the gradual return to normal in 2021.
Last year, China was Taiwan’s top export destination, but the growth in shipments to Europe (37 percent), other Southeast Asian countries (32 percent), and the United States (30 percent) all surpassed growth in exports to China (23 percent).
During the pandemic, Taiwan’s economy outperformed its peers as a key hub in the global technology supply chain for major companies like Apple Inc. As aforementioned, because more people shifted to working and studying from home, it boosted the volume of tech exports.
Due to a global shortage of semiconductors, Taiwan’s chip companies were swamped with orders, prompting them to expand production at home.
East Asia Forum suggests that Taiwan’s export boom is expected to continue as long as demand from the United States stays strong. However, given the current state of the world, private consumption rates are highly unlikely to increase anytime soon.
Also, inflation and interest rate hikes are expected, which could limit private consumption and investment.
Ultimately, exports in 2022 are unlikely to grow at the same speed as they did last year. “With high inflation and fading fiscal support dragging on retail spending in many key exports markets, we expect exports to level off this year,” says Capital Economics.
The Property Report editors wrote this article. For more information, email: [email protected].
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