Advance estimates for Taiwan GDP show the economy gained momentum in the three months to June, increasing 3.08 percent on the quarter after an increase of 1.76 percent in the three months to March. Although previously published PMI survey data indicated that activity in the manufacturing sector contracted over the quarter, today's GDP data are consistent with data showing solid growth in industrial production and exports. Planned tariff increases announced by the Trump Administration in early April were suspended soon after and not in force over the quarter but are scheduled to take effect in coming weeks.

GDP growth also accelerated in year-over-year terms, increasing 7.96 percent on the year in the three months to June after growth of 5.48 percent in the three months to March. This increase in year-over-year growth was driven by a bigger contribution of net exports to headline GDP growth, consistent with reports of a front-loading of orders ahead of tariff increases. Growth in private consumption and investment spending moderated but remained solid.

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.