The Taiwanese Economy in April 2025

Recent volatility in the Trump administration's tariff policies has intensified global financial market fluctuations. Tariff risks remain present, and if subsequent negotiations collapse, trade tensions may escalate again. Combined with frequent policy adjustments and uncertainty in the United States, business confidence has been undermined, and the global economic outlook remains pessimistic.
Domestically, despite strong demand for emerging technology applications and the U.S. temporary suspension of high reciprocal tariffs driving customers to front-load purchases, the information and electronics industry continued to perform strongly in April. However, traditional goods suffered from weaker demand compared to the previous month, overseas low-price competition, and declining international oil prices, which dragged down product prices and led related industry players to generally view the monthly economic conditions negatively. With the U.S. temporarily suspending reciprocal tariffs and reaching partial tariff reduction agreements with China, the manufacturing sector's outlook for the next six months has improved slightly compared to the previous month.
In the service sector, affected by reciprocal tariffs and volatile Trump statements, financial market uncertainty has increased. Taiwan's stock market experienced price declines and volume contraction in April, with significantly increased volatility. Additionally, the sharp appreciation of the New Taiwan Dollar has put exchange rate loss pressure on life insurance companies, leading financial-related industry players to generally view monthly economic performance negatively, with most holding conservative or weakening views on the economic outlook for the next six months.
In the construction sector, although driven by ahead-of-schedule progress in major projects such as highways and water conservancy, construction companies maintained a neutral view of the monthly economic outlook due to delays in rail projects and uncompleted residential projects that have not yet recognized revenue. Looking ahead, although Trump's tariff policies may affect high-tech companies' willingness to expand facilities, TSMC's continued investment in Taiwan, combined with steady advancement of public works projects, is expected to support the construction industry's future economic outlook to remain stable. Due to banks' continued cautious attitude toward mortgage business, credit controls, and the impact of Trump's reciprocal tariff policies, home-buying confidence has fallen to near-record lows, and housing market demand has weakened. In the future, with no signs of relaxation in anti-speculation policies, mortgage rates still above 2%, and increasing economic uncertainty, the housing market will be difficult to recover in the short term, and the overall situation requires cautious observation.
According to the Taiwan Institute of Economic Research (TIER), after model simulations, the composite indicators for manufacturing, services, and construction sectors continued their declining trend in April. Among these, the manufacturing composite indicator has declined for three consecutive months, while the service and construction sectors have shown declining trends for four consecutive months.
In foreign trade, continued strong demand for AI and high-performance computing, combined with the U.S. 90-day suspension of reciprocal tariffs, drove customers to actively stock up, significantly boosting the annual growth rates of information and communication products and electronic components. Most traditional industry products were also stimulated, with basic metals, plastic and rubber products, and machinery showing significant recovery in annual growth rates. Chemical products also saw rising annual growth rates due to doubled pharmaceutical exports to the U.S. On the import side, driven by international division of labor in the technology industry chain and export-derived demand, imports of integrated circuits and information and communication products remained strong, and semiconductor equipment purchases also grew substantially, keeping both capital equipment and agricultural and industrial raw material imports at high annual growth rates. Cumulative exports from January to April 2025 grew 20.62% compared to the same period last year, imports grew 20.44%, and the total trade surplus from January to April 2025 was $30.834 billion, an increase of 21.50%.
In domestic production, the manufacturing production index for April was 108.37, increasing 2.37% from the previous month and growing 23.68% compared to the same month last year. From detailed industry observations, strong demand for AI applications and cloud data services drove the annual growth rates of the electronic components industry and computer, electronic products, and optical products industry to continue showing double-digit growth in April. In contrast, automobiles and parts, chemical materials and fertilizers, and other industries were affected by poor market demand and competition from overseas competitors, with some manufacturers adjusting production downward and some car model parts shortages, causing production indices to continue declining. Total industrial production from January to April 2025 grew 14.31% compared to the same period last year, with manufacturing growing 15.22%.
For domestic consumption, due to continued increases in overseas travel and stock market volatility affecting people's consumption power for domestic luxury goods and durable goods, combined with the automotive market being in a transition period between old and new models and some shopping malls reducing operational scale due to renovations, several major retail industries saw annual growth rates turn from positive to negative in April. Cumulative retail sales from January to April this year increased 0.54% compared to the same period last year, with retail sale in non-specialized stores growing 3.01% annually. In the food and beverage sector, April food and beverage sales reached NT$81.5 billion, growing 1.96% annually. Restaurants and beverage stores benefited from multi-brand store expansion effects, launching co-branded new products and promotional offers to attract customers, while catering and group meal contracting businesses remained active due to continued strong demand for airline meals. Cumulative food and beverage sales from January to April increased 3.37% compared to the same period last year.
Regarding prices, although fruit prices remained at high levels, the upward trend moderated, and egg prices declined significantly compared to the same period last year, offsetting some of the increases. The annual growth rate of food prices decreased from 4.91% in March to 4.34% in April, affecting the overall index by 1.17 percentage points, a decrease of 0.15 percentage points from the previous month. Additionally, due to continued declines in fuel prices and falling communication fees, the overall annual growth rate of transportation and communication prices continued to decline. The overall CPI annual growth rate decreased from 2.32% in March to 2.03% in April, while the core CPI annual growth rate remained at 1.66%.
In the domestic financial market, the funding environment remained stable. In April 2025, the highest overnight interbank lending rate in the financial sector was 0.827%, the lowest was 0.811%, and the weighted average rate was 0.818%, down 0.003 percentage points from the previous month and up 0.006 percentage points from the same month in 2024. In the stock market, the Trump administration announced the implementation of reciprocal tariffs in early April, severely impacting global markets. Taiwan's stock market also plunged more than 2,000 points on the 7th, setting a record for the largest single-day point drop in history. Subsequently, Trump announced a 90-day suspension of tariffs for most countries, temporarily alleviating market panic, and the stock market decline also stabilized. However, with lack of substantial progress in tariff negotiations, investor confidence remained weak. The Taiwan Weighted Index closed at 20,235.03 points at the end of April, down 2.23%, with an average daily trading volume of NT$308.319 billion. Regarding exchange rates, the Trump administration's high tariffs and threats to replace the Federal Reserve chairman raised market concerns about U.S. economic stability, weakening global financial market confidence in the U.S. dollar and U.S. bonds. As a result, global capital flows changed, and combined with exporters selling foreign exchange and inflows from trust company overseas investments, the New Taiwan Dollar exchange rate strengthened, closing at 32.017 to the U.S. dollar at the end of April, appreciating 3.64%.

Business Survey Outcomes

The proportion of manufacturing firms that perceived their business as better than expected in April was 18.2%, a drop of 14.4 percentage points compared to 32.6% in the previous month. On the other hand, the proportion of those who perceived their business as worsening in the target month was 37.4%, a sharp increase of 12.7 percentage points compared to the 24.7% reported in the previous month. Additionally, the proportion of manufacturing firms that perceived their business as remaining constant in the target month was 44.5%, edging up 1.8 percentage points compared to the 42.7% recorded in the previous month.
Furthermore, in the target month, the segment of manufacturers who anticipated an improvement in their business over the next six months stood at 22.9%, representing an increase of 3.5 percentage points compared to the 19.4% recorded in March. Conversely, the proportion of firms foreseeing a deteriorating economic outlook was 29.2%, marking a decline of 3.7 percentage points from the 32.9% reported one month earlier. Meanwhile, 47.9% of manufacturing firms perceived their business outlook as remaining constant over the next six months, virtually unchanged from 47.7% in the previous month. Overall, manufacturers hold a conservative view of the future economic outlook.
The TIER Manufacturing Composite Indicator for the target month in 2025, adjusted for seasonal factors, experienced a corrective decline. The index reached 90.90 points in April 2025, declining 3.53 points from 94.43, reflecting weakening sentiment among manufacturers, marking three consecutive months of decline.
In addition, the TIER Service Sector Composite Indicator for the target month in 2025 exhibited a downward trajectory. It declined from a revised 88.44 points in March 2025 to 85.41 points—a drop of 3.03 points, representing four consecutive months of decline.
Lastly, the TIER Construction Sector Composite Indicator for April 2025, also adjusted for seasonal factors, stood at 90.38 points, down 2.98 points from 93.36 in the previous month, reflecting four consecutive months of decrease.

Analyses and Outlook of Industries

Following are manufacturers' sentiments that are industry-specific in the monthly TIER surveys:

Manufacturers’ sentiments that have been in decline in the April survey and are expected to deteriorate over the next six months include:
Yarn Spinning Mills, Paper Manufacturing, Industrial Chemicals, Petrochemicals Manufacturing, Man-made Fibers Manufacturing, Screw, Nut Manufacturing, Transport Equipment Manufacturing and Repairing, Motor Vehicles Manufacturing, Motorcycles Manufacturing, Motorcycles Parts Manufacturing, Bicycles Manufacturing, Wholesale, Securities, Insurance.
　
Manufacturers’ sentiments that have been in decline in the April survey, but are expected to improve over the next six months include:
None.
　
Manufacturers’ sentiments that have been in decline in the April survey and are expected to remain sluggish over the next six months include:
Edible Oil Manufacturing, Flour Milling and Grain Husking, Printing, Plastics and Rubber Raw Materials, Petroleum and Coal Products Manufacturing, Rubber Products Manufacturing, Plastic Products Manufacturing, Data Storage Media Units Manufacturing and Reproducing, Education and Entertainment Articles Manufacturing, Real Estate Investment, Retail Sales, Restaurants and Hotels, Banks.
　
Manufacturers surveyed who felt the April outlook was the same as the previous month, but the outlook is expected to exacerbate over the next six months include:
Textiles Mills, Fabric Mills, Chemical Products Manufacturing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal Dies, Machinery and Equipment Manufacturing and Repairing, Cutlery and Tools Manufacturing, Industrial Machinery, Motor Parts Manufacturing, Bicycles Parts Manufacturing, Transportation and Storage.
　
Manufacturers surveyed who felt the April outlook was the same as the previous month, but the outlook is expected to improve over the next six months include:
Food, Frozen Food Manufacturing, Prepared Animal Feeds Manufacturing.
　
Manufacturers surveyed who felt the April outlook was the same as the previous month and the trend is expected to continue for the next six months include:
Manufacturing, Slaughtering, Wood and Bamboo Products Manufacturing, Non-metallic Mineral Products Manufacturing, Porcelain and Ceramic Products Manufacturing, Glass and Glass Products Manufacturing, Cement and Cement Products Manufacturing, Metal Structure and Architectural Components Manufacturing, Electric Wires and Cables Manufacturing, Communications Equipment and Apparatus Manufacturing, Audio and Video Electronic Products Manufacturing, Precision Instruments Manufacturing, Construction, Basic Civil Structure Construction, Telecommunication Services.
　
Manufacturers’ sentiments that have improved in the April survey and is expected to deteriorate over the next six months include:
None.
　
Manufacturers’ sentiments that have improved in the April survey and is expected to remain upbeat over the next six months include:
Soft Drink Manufacturing, Electrical Machinery, Supplies Manufacturing and Repairing, Electronic Machinery.
　
Manufacturers’ sentiments that have improved in the April survey and the trend is expected to continue for the next six months include:
Apparel, Clothing Accessories and Other Textile Product Manufacturing, Leather, Fur and Allied Product Manufacturing, Electrical Machinery, Electrical Appliances and Housewares Manufacturing, Electronic Parts and Components Manufacturing.