Taiwan cuts 2023 GDP growth to 1.42%, lowest in 14 years

TAIPEI (TVBS News) — Taiwan's Directorate-General of Budget, Accounting and Statistics (DGBAS) announced on Tuesday (Nov. 28) that it has lowered the nation's 2023 Gross Domestic Product (GDP) growth forecast to 1.42%, the lowest in 14 years and marking the most sluggish economic performance since the financial crisis.

The DGBAS attributed the downgrade to weaker-than-expected exports and private investment, which have had a direct impact on year-end bonuses for Taiwanese workers. A survey by a local job bank estimated that while 99.6% of companies are expected to distribute bonuses, the average amount has shrunk to 1.08 months' worth of salary – a decrease of 0.25 months from the previous year, hitting a 10-year low.

Sector-wise, the financial industry continues to lead in bonus payouts, offering an average of 1.83 months' salary for the 12th consecutive year. The semiconductor industry follows with an average of 1.38 months, while the construction industry holds the third spot at 1.23 months. On the lower end, the healthcare services industry averages just 0.97 months of salary, and the accommodations and food services sector lags further behind at only 0.59 months.

Despite this year's downward revision, the DGBAS remains optimistic for 2024, forecasting a GDP growth rate rebound to 3.35%. Financial analyst Wesker Jen commented that the Ukraine-Russia war, the Israel-Palestine conflict, and ongoing inflation will continue to pose challenges to the global economy.

Looking ahead to 2024, local job banks predict that pay increases will occur in 47.5% of companies, with an average salary hike of 3.2%—marginally less by approximately NT$42 compared to 2023. 

Experts caution that a full recovery of Taiwan's economic situation may not be as swift as hoped.

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