Taiwan ranked world’s 8th most competitive economy

Based on a newly released forecast from the International Monetary Fund (IMF), Taiwan’s economic growth rate is ranked No. 1 among the four Asian Tigers in 2010, and is expected to remain at the top from 2013 to 2015. According to Christina Liu, the new chairperson of the cabinet-level Council for Economic Planning and Development, Taiwan will continue to be at the top of the pack by embracing an open market policy.

The IMF predicted in April that Taiwan’s economic growth rate would be 6.5 percent, topping the other three economies, Hong Kong, Singapore and South Korea. Although Taiwan used to lead in growth, it has not done so over the past few years. After the global financial tsunami, the world economic order has witnessed a reshuffle so that the island is again outperforming its rivals.

Taiwan’s GDP for the first quarter of 2010 reached over 10 percent, the highest single quarterly figure in 20 years. The director-general of Budget, Accounting and Statistics also said that the GDP forecast will be revised from 4.72 to 5.3 percent.

Many other organizations have upgraded Taiwan’s GDP forecast, including Global Insight, a leading economic and financial intelligence publication, which has upped its February forecast from 5 percent to 5.3 percent.

The United Daily News reported government officials as saying that all indicators of production, export, expenditure and investment show a better forecast than the numbers released in February. First quarter exports reached US$92.17 billion, about 50 percent higher than the same period in 2009. The index of first quarter industrial production rose to 47.12 percent, the highest recorded for a single quarter.

There were 435 cases of overseas investment approved in Taiwan during the first quarter, almost a 26 percentage point jump from the same period in 2009. The total amount of overseas investment was US$1.6 billion, 50 percent higher than the same period in 2009.

In addition to economic growth, Liu noted that Taiwan has worked hard to increase employment, solve its structural unemployment, stabilize commodity prices, and balance income distribution. This has reflected positively in Taiwan’s competitiveness ranking as well.

Taiwan is now the eighth most competitive economy in the world according to the 2010 World Competitiveness Yearbook published by the Swiss-based Institute for Management Development (IMD). This is a huge jump from its 2009 standing of 23rd place. Rising corporate competitiveness and government efficiency have contributed to the island’s ascent. Currently, Singapore is ranked first, followed by Hong Kong and the US, which placed first in 2009.

Regarding Taiwan’s competitiveness ranking, Suzanne Rosselet, Deputy Director of the World Competitiveness Center at IMD, told the Central News Agency that it is really incredible to see Taiwan jump from 23rd to 8th. This shows Taiwan has a high degree of confidence in economic development. Also, based on the “first in first out” theory - meaning the first to enter the crisis should also be the first to exit - Rosselet suspects Taiwan will lead East Asia out of the woods.

After the recession of 2008, Taiwan’s recovery has benefited from China's continued rapid growth, which has helped boost Taiwan’s competitiveness ranking. According to Rosselet’s analysis, the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China will further improve overall economic prospects.