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In its world economic outlook published in October 2013, the IMF expected Taiwan’s economy to have grown by 2.2% in 2013, down from its original forecast of 2.9%, citing sluggish exports and a lack of private investment as the major reasons for revising the forecast. It also warned that the downshift in China’s GDP growth targets toward a more sustainable 6–7% would impact commodity exporters in the developing economies, including Taiwan. The Taiwanese government is predicting 2.31% growth for 2013 and in February 2014 it forecast growth for 2014 to come in at around 2.82%, with growth being driven by improvements in the global economy and increasing domestic consumption. Taiwan’s public debt is a manageable 41% of GDP and is expected to remain around that figure through 2014. Its debt has an investment-grade rating from all the major ratings agencies. Taiwan’s currency, the new Taiwan dollar, remains vulnerable to any move by the US Federal Reserve to taper off its quantitative easing program, since a strengthening dollar will impact it adversely. As a major exporter, with exported goods accounting for some 75% of GDP, the country is vulnerable to external shocks such as a slowdown in global trade.

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