TAIPEI (Taiwan News) — As Taiwan’s rapid GDP expansion is rooted in the manufacturing sector, residents working in the larger services sector will feel the benefits of the growth much later, reports said Tuesday (Nov. 30).
The government recently raised its forecast for GDP growth this year to 6.09%, the most in 11 years, and GDP per capita is expected to reach US$42,802 (NT$1.18 million), surpassing South Korea’s US$42,719, in 2025, Radio Taiwan International (RTI) reported.
Despite the GDP per capita rising to US$32,787 this year, most of the increase was the result of contributions by the manufacturing sector, said Dachrahn Wu (吳大任), executive director of the Research Center for Taiwan Economic Development at National Central University (NCU).
As a result, areas where the service sector dominates, such as Taipei, have not felt the positive impact of the growth, especially since they have been hit by inflation and the surge in COVID cases in May, he said. Nevertheless, as manufacturing employees start spending their higher income, rising consumption will also benefit services, with the effect becoming more obvious in 2022, according to Wu.