Advance estimates for Taiwan GDP show the economy contracted by 1.08 percent on the quarter in the three months to December, down sharply from growth of 1.83 percent in the three months to September, with year-over-year growth also weakening from an increase of 4.01 percent to a decline of 0.86 percent. Industrial production and PMI survey data also showed a severe contraction in the manufacturing sector towards the end of the year.

The year-over-year fall in GDP in the three months to December was driven by weaker external demand, with exports falling 5.09 percent after an increase of 2.75 previously. Consumer spending and investment also grew at a slower pace, partly offset by stronger growth in government spending.

GDP data are a comprehensive measure of Taiwan’s overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP calculates the total market value of goods and services produced in Taiwan within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only.

Gross domestic product (GDP) can be measured using three approaches, namely the production, income and expenditure approaches. The production measure of GDP is derived from firm level data and estimates the value added by all producing industries in the Taiwan economy. The income measure of GDP is derived from earnings data and estimates how the income earned from these producing industries is then distributed throughout the economy as returns to labor, capital and government. The expenditure measure of GDP is derived from data estimating spending on goods and services by final end users and includes consumption, investment and exports minus the value of imports.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.