Taiwan’s Strong GDP Growth Belies Erosion of Household Earnings

By editor
May 30, 2024
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(Bloomberg) — Taiwan is set to release data Thursday that shows its economy growing at the fastest pace in almost three years. What the figures won’t show is that inflation has outpaced wage growth over much of that time, eroding real incomes for households across the island.

Powered by global demand for artificial intelligence-related technology, economists surveyed by Bloomberg expect Taiwan to report that gross domestic product in the first quarter grew 6.5%. That would be on par with an initial reading of 6.51% released in April and be the fastest pace of expansion since the second quarter of 2021.

At the same time, inflation outpaced average regular wage growth in Taiwan in two of this year’s first three months. Inflation either outpaced or equaled wage gains in 10 months of last year.

Frustration over cost-of-living issues is one of the top challenges facing newly inaugurated President Lai Ching-te, who won election in January with just 40.1% of the popular vote. His Democratic Progressive Party also lost control of the legislature, underlining the Taiwan’s political divide.

In response to public angst over the issue, Lai has promised to bolster wages and to support small and medium-sized business so as to better distribute the benefits of economic growth.

Read More: Taiwan Lawmakers Pass Bill to Curb President’s Powers

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