Country Economic Forecasts > Taiwan

The Taiwanese economy continued to show a disappointingly sluggish performance in August, undermined by the ongoing weakness in exports and regional trade. Indeed, the persistent stream of bad news prompted the central bank to lower its key interest rate by 12.5bp to 1.75% in September, its first cut in six years. In the light of these developments, we have cut our already below-consensus forecast for 2015 GDP again, to 1%, from 1.3% previously. The latest downgrade was largely driven by the poor trade figures for August and the gloomy indicators on the state of the Chinese economy. Exports in US$ terms were down nearly 15% year-on-year in August and the Nikkei Manufacturing PMI hit a three-year low. Given the increasing uncertainty about global economic developments, most particularly in China, we have also adopted a more cautious forecast for GDP growth in 2016, expecting 2.9% now, down from 3.2% in August.