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VietnamTaiwan, along with South Korea, Singapore, and Hong Kong, is recognised as one of the Four Asian Tigers—regions that underwent rapid industrialisation and significant economic growth from the 1960s through the 1990s, subsequently evolving into high-income economies.
In 2020, despite the global economic downturn caused by the Covid-19 pandemic, Taiwan’s economy demonstrated resilience, achieving a gross domestic product (GDP) growth rate of 3.1%, the highest among the Asian Tigers. This robust performance continued into 2021, with GDP expanding by 6.5%, marking the most substantial growth since 2010. However, growth moderated to 2.5% in 2022 and further to 1.3% in 2023.
The International Monetary Fund (IMF) projects Taiwan’s GDP growth to rebound to 3.7% in 2024 and 2.7% in 2025.
Taiwan GDP Annual Growth Rate (in %)
Taiwan has a total population of approximately 23.9 million.
The unemployment rate has remained relatively stable, increasing slightly from 3.7% in 2019 to 4.0% in 2021, before declining to 3.7% in 2022. In 2023, Taiwan’s unemployment rate averaged 3.48%, marking the lowest level since 2000.
The IMF forecasts the unemployment rate to reach 3.7% in 2024 and 3.6% in 2025.
Taiwan Unemployment Rate (in %)
The Taiwan economy is a global leader in electronics manufacturing, ranking as the fourth-largest producer worldwide and serving as the foremost supplier of semiconductors. Domestic consumption and investment have bolstered economic growth, and the country’s export-oriented, technology-driven industries contribute to a resilient economic outlook.
Currency and Central Bank
Taiwan’s official currency is the New Taiwan dollar (TWD), subdivided into 10 dimes or 100 cents, though cents are rarely used in transactions. Introduced in 1949, the TWD replaced the Old Taiwan dollar.
The Central Bank of the Republic of China (Taiwan) is actively exploring the development of a central bank digital currency (CBDC). As of December 2023, the central bank completed a wholesale CBDC feasibility and technology study and is gathering feedback to refine the platform design. However, there is no set timetable for the CBDC’s launch, with officials emphasising the process will be “huge and complex”.
Persistent global inflation has impacted Taiwan’s economy. The IMF reported an inflation rate of 2.5% for Taiwan in 2023 and forecasts a decrease to 1.9% in 2024 and further down to 1.4% in 2025, aligning with global disinflation trends.
Taiwan Inflation (in %)
Industry and Trade
Taiwan’s economy is predominantly driven by the services sector, according to Statista, which in 2023 accounted for approximately 63.2% of the nation’s GDP and employed about 60% of the labour force. The industrial sector contributed around 36.8% to the GDP, with the manufacturing subsector alone comprising about 33%.
Despite Taiwan’s prominence in semiconductor and electronics manufacturing, the services sector has faced challenges related to competitiveness. Additionally, labour-intensive industries have increasingly relocated operations to countries with lower labour costs.
The tourism industry has shown signs of recovery following the Covid-19 pandemic. In 2019, Taiwan welcomed a record 11.84 million foreign visitors. However, strict entry restrictions during the pandemic led to a significant decline in tourist arrivals and revenue. With the easing of restrictions in October 2022, the Tourism Bureau set a target of 6 million tourist arrivals for 2023, a goal that was achieved by mid-December.
Taiwan remains a leading global supplier of semiconductors, computers, mobile phones, and computer screens. The country’s trade is heavily reliant on electrical machinery and equipment, with China, the United States, Hong Kong, and the United Kingdom serving as its top trading partners in 2023.
Taiwan Economy: Balance of Trade
Stock Exchanges and Capital Markets
The Taiwan Stock Exchange (TWSE), established in 1961 and operational since 1962, remains Taiwan’s principal stock exchange. Trading hours are from 9:00 a.m. to 1:30 p.m. local time (NST), Monday through Friday. The Taiwan Capitalization Weighted Stock Index (TAIEX), the main benchmark index, includes all listed companies on the TWSE, excluding preferred stocks, full-delivery stocks, and newly listed stocks.
Taiwan’s largest companies by market capitalisation in 2024 include Taiwan Semiconductor Manufacturing Company (TSMC), valued at approximately $806 bn, followed by Hon Hai Precision Industry (Foxconn), MediaTek, Fubon Financial Holding and Quanta Computer. These companies collectively represent Taiwan’s global leadership in technology and electronics, playing a vital role in its capital markets and economic growth.
Bond Market
Taiwan’s bond market, while substantial in size, continues to exhibit low transaction volumes, reflecting its longstanding contradictory tendencies. The market offers a diverse array of instruments, including government bonds, corporate bonds, financial debentures, beneficiary securities, asset-backed securities, foreign bonds, and sustainability bonds.
In 2023, total bond issuance amounted to NT$1,580.0 bn, a decrease of NT$72.7 bn from the previous year. Corporate bond issuance significantly increased, totalling NT$773.3 bn—up by NT$300.2 bn—indicating heightened corporate funding needs. Conversely, central government bond issuance declined to NT$478.0 bn, down by NT$42.1 bn. Bank debenture issuance also fell substantially, amounting to NT$62.7 bn, a decrease of NT$86.2 bn compared to the previous year.
Formosa bonds, which are issued in Taiwan and denominated in foreign currencies, have been an attractive funding option for overseas issuers. However, new issuance in this market has been declining since peaking in 2021. In 2023, Formosa bond issuance volume shrank by 54.6% year-on-year to $7.66 bn, with the number of deals halving to 71 from 142. This decline is attributed to higher foreign exchange hedging costs and reduced demand from Taiwanese life insurance firms, the primary investors in this market.
Real Estate Market
In 2024, Taiwan’s real estate market experienced a resurgence in demand and property transactions, reversing the cooling trend observed in 2023. In the first half of 2024, property transactions in Taiwan’s six largest cities—Taipei, New Taipei, Taoyuan, Taichung, Tainan, and Kaohsiung—totalled 136,499 units, marking a substantial 27.6% increase compared to the same period in the previous year.
This heightened demand has led to significant increases in house prices across various regions. For instance, in the third quarter of 2024, Hsinchu’s house prices rose by 17.72% year-on-year, Taichung’s by 12.83%, and Kaohsiung’s by 13.56%.
Despite these gains, housing affordability remains a critical issue, particularly in Taipei. The house price-to-income ratio in Taipei stood at approximately 15.71 in 2023, indicating that an average household would need to allocate nearly 16 years of total income to afford a home.
In response to escalating home prices, Taiwan’s central bank has implemented measures to maintain financial stability. In June 2024, the central bank raised the reserve requirement ratio by 25 basis points to address concerns in the property market.
Taiwan Housing Index (in %)
Editorial Note:
This article was written with the assistance of AI. A human editor reviewed and refined the text for accuracy and quality before publication.
Source of charts: tradingeconomics.com
