The performance of Taiwan’s economy has been excellent, with the EPI score projected to be 95.3%, or an A- level, in 2016. An economic slowdown in China, Taiwan’s main trade partner, has created headwinds to the Taiwanese economy.

GDP growth slowed down slightly in 2015 and is unlikely to recovery in 2016-2017, unless the Chinese economy turns to faster growth rates. Domestic demand is still likely to be the main driver that would support growth in 2016. Government spending is likely to start picking up later in 2016, after a slowdown created by political conflict in 2015. Investment growth is likely to be subdued on poor sentiment and will not push GDP growth in 2016. Still, inflation is projected to be close to zero in 2016, driven by low oil prices, and unemployment of 4% is low.

The 5-Minute Economist projects Taiwan’s EPI score to stay at A- level in the next few years, with gradually increasing inflation compensated by improved GDP growth.