Taiwan: why aren’t consumers joining the party?

Taiwan’s economy is booming and this has been driven almost entirely by exports, whereas domestic demand, and especially consumer spending, has been sluggish. That’s because faster wage increases in the electronics sector have benefited only a small share of the workforce. Some of that additional income appears to have been used to purchase residential property, contributing to a run-up in prices in the city of Hsinchu. That said, we expect consumer spending to pick up from here which is one factor underpinning our above-consensus forecast for 5% GDP growth in 2026.