Business Monitor International


Taiwan Business Forecast Report

Published 26 February 2014

  • 51 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Taiwan Business Forecast Report

Core Views

  • Taiwan's economy accelerated strongly in Q413, leading the island to record a full-year 2013 real GDP growth of 2.2%, marginally eclipsing our forecast of 2.1%. While we remain constructive on economic momentum in the coming quarter, we remain less upbeat on Taiwan's growth trajectory through 2014. We expect the economy to face key downside risks from a slowing Chinese economy, as well as a possible correction within the local property market. We are happy to remain below consensus with our real GDP growth forecast for 2014 coming in at 3.0%, versus 3.5%.

  • While the Taiwanese dollar has lost 3.4% of its value since the sell-off which began in October 2013 and 1.5% since the start of 2014, it appears to have found some measure of stability in recent trading sessions. We expect the unit to trade between the range with resistance at the TWD30.20/US$ level and support at the TWD30.70/US$ level. We are forecasting the currency to average TWD30.50/US$ in 2014 before ending the year at TWD30.70/US$.

  • Taiwan's biggest long-term political challenge is managing its deepening economic ties with mainland China, so that it retains its de facto political independence. Beijing appears to be pursuing the absorption of Taiwan by stealth, but this could yet lead to a backlash from Taiwanese voters.

  • Taiwan's property market appears to be moving in the opposite direction to the broader economy. Despite relatively sluggish economic performance over the past year, Taiwanese real estate continues to boom. We have highlighted before that property boom has not been backed by solid economic fundamentals and the continuing rise in prices merely makes our conviction stronger. With property demand expected to be hit by a weakening economy, while housing supply continues to increase, we believe that a correction in the sector is only a matter of time.

Key Risks To Outlook

  • Downside Risks To Growth Forecast: Should we see a re-emergence of a crisis in the eurozone, or a...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Cross-Strait Relations: Deepening Political Ties The Next Major Step
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
10
Legal Status Quo To Prevail
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Near-Term Optimism To Reverse As 2014 Progresses
14
TABLE: ECONOMIC ACTIVITY
14
Fiscal Policy
15
Share Sales No Panacea
15
TABLE: FISCAL POLICY
15
Monetary Policy
16
Property Correction Merely A Matter Of Time
16
Currency Forecast
17
TWD: Weakness In Store, But Downside Capped
17
TABLE: MONETARY POLICY
17
TABLE: CURRENT ACCOUNT
18
Chapter 3: 10-Year Forecast
21
The Taiwan Economy To 2023
21
Multiple Headwinds Against Structural Growth
21
TABLE: Long -Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
29
Infrastructure
30
TABLE: BMI LEGAL FRAMEWORK RATING
30
TABLE: LABOUR FORCE QUALITY
31
TABLE: ASIA, ANNUAL FDI INFLOWS-
32
TABLE: TRADE & INVESTMENT RATINGS
33
Operational Risk
34
Chapter 5: Key Sectors
37
Autos
37
TABLE: Auto Sales, 2010-2017
38
Food & Drink
39
TABLE: Auto Production, 2010-2017
39
Table : Food Consumption Indicators - Historical Data & Forecasts , 2010-2017
40
Table : Taiwan Alcoholic Drinks , Value /Volume Sales - Historical Data & Forecasts , 2010-2017
41
Table : Taiwan Retail Indicators - Sales Value by Format - Historical Data & Forecasts , 2010-2017
42
Table : Taiwan Food & Drink Trade Indicators - Historical Data & Forecasts , 2010-2017
43
Other Key Sectors
45
TABLE: Pharma Sector Key Indicators
45
TABLE: Infrastructure Sector Key Indicators
45
TABLE: Oil and Gas Sector Key Indicators
45
TABLE: Telecoms Sector Key Indicators
46
TABLE: Defence and Security Sector Key Indicators
46
TABLE: Freight Key Indicators
46
Chapter 6: BMI Global Assumptions
47
Global Outlook
47
Fairly Benign Prognosis
47
Table : Global Assumptions
47
Table : Developed States , Real GDP Growt H, %
48
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
48
Table : Emerging Markets , Real GDP Growth , %
49

The Taiwan Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Taiwan and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Taiwan's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Taiwan's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Taiwan's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Taiwan, including currency volatility, the commodity price boom and protectionist policies.

The Taiwan Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Taiwan economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Taiwan through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Taiwan Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Taiwan and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Taiwan, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Taiwan over the next 5-years?

BMI's Taiwan country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Taiwan Market - Political Strengths, Weaknesses, Opportunities and Threats facing Taiwan.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Taiwan's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Taiwan's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Taiwan, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Taiwan's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Taiwan will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Taiwan's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express