Business Monitor International


Taiwan Business Forecast Report

Published 28 May 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 slowed in Q114 likely on the back of a moderating expansion in private consumption and exports. While we remain fairly constructive on Taiwan's trade prospects in the near term, we do not believe that recovering demand in the US and Europe will be able to overcome the drag from China's slowing economy, which will inadvertently weigh on the island's economy given its heavy reliance on the mainland. We therefore are happy to maintain our below-consensus (3.2%) real GDP growth forecast of 3.0%.

  • From a political perspective, the recent student protests against the trade pact with mainland China may catalyse a widening divide within the ruling Kuomintang (KMT) party, which would inadvertently lead to some instability within the political environment. In the event that the trade pact is rescinded, Taiwan could suffer longer-term economic implications stemming from not only a deterioration in ties with China, but also the inability to establish much-needed free trade agreements with its other trade partners.

  • The recent acceleration in Taiwan's consumer price inflation is more likely a result of weather-related food price inflation than a sustained pickup in economic activity. As pressures from food prices start to abate, while economic growth remains fairly moderate, inflationary pressures will remain well contained. We expect monetary conditions to remain accommodative given that the central bank remains cautious towards the island's economic growth prospects.

Key Risks To Outlook

  • Downside Risks To Growth Forecast: Should we see a re-emergence of a crisis in the eurozone, or a downward spiral in China's economy, we can expect Taiwan to head into a sharp recession

Macroeconomic Forecasts (Taiwan 2012-2015)
Indicator 2012 2013e 2014f 2015f
Nominal GDP, USDbn 476.0 490.4 533.6 578.1
Real GDP growth, % y-o-y 1.5 2.1 3.1 4.1
Consumer price inflation, % y-o-y, eop 1.6

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
Foreign Policy
8
Retracting China Trade Agreement Carries Considerable Economic Risk
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Legal Status Quo To Prevail In 2010s
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
China Dependence Will Lead To Slower-Than-Expected Recovery
14
table: Economic Activity
14
Fiscal Policy
15
Shelving Nuclear Plant Carries Economic Risks, Highlights Political Deterioration
15
TABLE: Fiscal Policy
15
Monetary Policy
16
Monetary Policy To Remain Growth Supportive
16
Balance Of Payments
17
Trade Recovery Continues But China Risks Linger
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
Infrastructure
29
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
29
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
35
Defence
35
TABLE: Defence Expenditure, 2010-2018
36
Freight Transport
40
TABLE: Rail Freight
40
TABLE: Road Freight
40
table: Air Freight
41
table: Maritime Freight
41
table: Trade Overview
42
Other Key Sectors
49
Table: Oil and Gas Sector Key Indicators
49
Table: Pharma Sector Key Indicators
49
table: Autos Sector Key Indicators
49
Table: Telecoms Sector Key Indicators
50
Table: Food and Drink Sector Key Indicators
50
Table: Infrastructure Sector Key Indicators
50
Chapter 6: BMI Global Assumptions
51
Global Outlook
51
Growth Increasingly Polarised
51
Table: Global Assumptions
51
Table: Developed States, Real GDP GrowtH, %
52
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
52
Table: Emerging Markets, Real GDP Growth, %
53

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 Rankings 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 Rankings 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 Rankings 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 Rankings assess explicit short- and long-term risks to political stability; latest ankings, 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 Rankings with SWOT Analysis - Business Environment Risk Rankings for Taiwan, benchmarked against rankings 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 Rankings.

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