April 2023  
Demand in the European and American markets is sluggish; domestic consumption is the main engine of Taiwan’s GDP growth in 2023
TIER forecast: Taiwan’s 2023 annual GDP growth rate will stand at 2.31%, 0.27 percentage points lower than previous forecast
After observing recent domestic and international economic situations, it can be seen that while the previous bank crisis in the US and Europe has been controlled, the effects of tightening monetary policies are gradually fermenting. This has caused a significant slowdown in manufacturing activities in various countries, leading to an increase in financial risk and a global economic slowdown. In terms of domestic conditions, due to an increase in working days in March compared to the previous month, the manufacturing industry’s exports, production index, and export orders have all increased. As a result, the proportion of manufacturers who are optimistic about the current month’s economic performance is significantly higher than those who are pessimistic. The service industry is benefiting from the gradual return of consumer traffic and the impressive performance of the stock market, which is helping the catering and finance-related service industries to be optimistic about their current month’s economic performance. However, the construction industry has been affected by the continued slowdown in factory construction progress and the uncertain economic prospects, causing both buyers and sellers to be unable to hold an optimistic view of the domestic property market in the next six months. Therefore, based on the results of the survey, the business composite indicator for the manufacturing and service industries continued to rise in March. Regarding the updated overall economic forecast by the Taiwan Institute of Economic Research (TIER), the global economic slowdown has weakened the consumer momentum in end markets, and the industry chain continues to adjust inventory. The growth momentum of construction project investment is weak, and both import and export orders in the first quarter have experienced double-digit declines. This slowdown in export momentum also affects investment growth. Therefore, this forecast has revised downwards the private investment and import and export performance. Overall, it is expected that Taiwan’s economy will show a lukewarm internal temperature and a cold external environment this year. TIER predicts that the domestic economic growth rate in 2023 will be 2.31%, a downward revision of 0.27 percentage points from the January 2023 forecast. ...Read more
Taiwan’s TSMC still communicating with US about subsidy conditions
Taiwan Semiconductor Manufacturing Co. (TSMC) has reportedly objected to conditions for $15 billion (NT$458.6 billion) in aid from the United States government, reports said on April 20. The world’s largest computer chip contract manufacturer was not keen on rules potentially forcing it to disclose detailed information about its operations and to share profits. TSMC was planning to invest US$40 billion in a plant in Arizona scheduled to start operations next year. The Taiwan company was reportedly planning to produce 4-nanometer and 3nm semiconductors in Arizona. The new investment figure of US$40 billion announced last December was more than three times the original amount (Source: Taiwan News).

Taiwan, Canada to begin first round of FIPA talks (Source: Focus Taiwan).
Industrial output shrinks for 7th month (Source: Taipei Times).
Taiwan Economic Research Monthly
Spring Festival should not be forced to take too many days off
During the 2023 Lunar New Year holiday, there were ten consecutive days off, which was considered by some to be too long. Similar concerns were raised in 2010 when there was a nine-day holiday, and when the government implemented the "one day off per week" policy in 2017, as well as before the implementation of the two-day weekend policy more than 20 years ago. While the total number of annual holidays remains the same, the allocation of holidays should essentially be an issue of efficiency and personal choice. However, over the years, the government has often overlooked the fact that mandatory holidays may limit individual freedom of choice and harm social efficiency.
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