Taiwan’s Economic Momentum and Prospects

Taiwan’s Economic Momentum and Prospects

Although Taiwan’s economy has entered a more-mature stage in recent years, growth momentum has been maintained. In the latest evaluation announced by the World Economic Forum (WEF) in 2005, Taiwan’s growth competitiveness was ranked 5th in the world and number one in Asia.
In 2005, key real-side macroeconomic indicators showed that Taiwan’s economy achieved steady growth, expanding at a pace of 4.09%. But while foreign demand contributed more than 60% of economic growth, private consumption grew only 3.0% and private investment decreased 1.3%. Hence, Taiwan’s primary tasks for ensuring economic growth are to give further stimulus to private investment and private consumption. Furthermore, to counterbalance the falling profitability of high-tech industries and emigration of traditional industries, Taiwan also needs to improve the innovative capacity of its industry. On this basis, the five main strategies for improving Taiwan’s economic development are: (1) pursuing sustainable economic growth; (2) promoting innovation-oriented industries; (3) establishing sound financial and fiscal systems; (4) developing a favorable investment environment; and (5) extending the reach of global logistics operations.