Exports best indicator of Taiwan economy: report

 domestic GDP components in isolation.

It has been noted that when analysing Taiwan’s economy, the importance of exports cannot be overstated.

According to a research note from Standard Chartered, Taiwan’s private fixed capital formation has a strong correlation with external demand cycles.

Also, capex, especially among private companies, is heavily dependent on external demand. Taiwan’s private-sector investment (including inventory) is closely tied to export cycles, and this needs to be factored in when assessing the growth outlook.

Here's more from Standard Chartered:

This echoes our recent findings that Taiwan’s economy is highly sensitive to changes in the growth rates of the world’s major economies.

Instead of looking at domestic GDP components in isolation, a heavy weight should be placed on exports, in our view.

Our GDP tracker for Taiwan uses exports and the leading index in our GDP tracker for Taiwan.