Taiwan’s “misery” index, the sum of the unemployment and inflation rates, is expected to climb to 6.08 percent this year, its worst showing since 2012, amid an increasing cost of living and rising risk of job losses, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said last week.
The agency attributed the rise in the misery gauge to surges in the consumer price index (CPI), which is expected to increase 2.48 percent annually this year, as Russia’s invasion of Ukraine prompted price hikes in a wide range of commodities including oil, natural gas and metals such as nickel.
The DGBAS had previously said that the CPI increase would be short-lived, but last month it climbed 3.27 percent from a year earlier, reaching a nearly 10-year high. Although the agency blamed the increasing prices of imported goods, the prices of 17 necessity goods rose to their highest in three-and-a-half years. Egg prices surged the most by about 27 percent annually, followed by flour (7.13 percent, the highest in more than 10 years), bread (6.6 percent, the highest in seven years) and tissue paper (4 percent, the highest in about two-and-a-half years).
The government has underestimated the risk of inflation, amid overly optimistic forecasts of 4.24 percent annual GDP growth this year, thanks to a long upcycle of exports. It expects a strong economy to prompt businesses to raise wages and cushion the effects of inflation. However, the war in Ukraine is expected to decelerate GDP growth to 4.02 percent, DGBAS Minister Chu Tzer-ming (朱澤民) told lawmakers last week. Cathay Financial Holding held a more cautious view, cutting its forecast for GDP growth to 3.7 percent, expecting the war to curb global demand and further boost inflation.
Despite the GDP growth projections, average Taiwanese are unlikely to feel any economic benefit. The average monthly regular wage in the first two months of the year fell 0.16 percent from a year earlier, extending a downtrend due to uneven growth in different sectors. Local manufacturers raised wages by 4.86 percent year-on-year, but companies in the service sector cut wages by 0.1 percent, as they struggle to cope with the continuing effects of COVID-19 restrictions.
The economic pain people are experiencing is greater than the misery index shows, as soaring housing prices and long-stagnant wages are not factored into the gauge, which was first introduced in the 1970s in the US. The housing price increases in Taoyuan, Taichung and Tainan all exceeded 10 percent last year, while prices gained 5.58 percent in Taipei and 6.2 percent in New Taipei City, a survey released earlier this month by the Ministry of the Interior showed.
The debt burden is much higher for homeowners in Taipei, where housing prices spiked by 16.29 times the average household income, with 65.09 percent of the money going to mortgage payments, it said, far exceeding the 30 percent considered reasonable by the ministry.
Government officials should put themselves in the shoes of ordinary Taiwanese, and come up with effective measures to curb inflation and skyrocketing real-estate prices. Boosting energy subsidies and extending cuts on taxes on energy imports are also good measures. To rein in soaring property prices, the government should draw up policies that seek to account for the effects of central banks raising interest rates.
In the US’ National Security Strategy (NSS) report released last month, US President Donald Trump offered his interpretation of the Monroe Doctrine. The “Trump Corollary,” presented on page 15, is a distinctly aggressive rebranding of the more than 200-year-old foreign policy position. Beyond reasserting the sovereignty of the western hemisphere against foreign intervention, the document centers on energy and strategic assets, and attempts to redraw the map of the geopolitical landscape more broadly. It is clear that Trump no longer sees the western hemisphere as a peaceful backyard, but rather as the frontier of a new Cold War. In particular,
When it became clear that the world was entering a new era with a radical change in the US’ global stance in US President Donald Trump’s second term, many in Taiwan were concerned about what this meant for the nation’s defense against China. Instability and disruption are dangerous. Chaos introduces unknowns. There was a sense that the Chinese Nationalist Party (KMT) might have a point with its tendency not to trust the US. The world order is certainly changing, but concerns about the implications for Taiwan of this disruption left many blind to how the same forces might also weaken
As the Chinese People’s Liberation Army (PLA) races toward its 2027 modernization goals, most analysts fixate on ship counts, missile ranges and artificial intelligence. Those metrics matter — but they obscure a deeper vulnerability. The true future of the PLA, and by extension Taiwan’s security, might hinge less on hardware than on whether the Chinese Communist Party (CCP) can preserve ideological loyalty inside its own armed forces. Iran’s 1979 revolution demonstrated how even a technologically advanced military can collapse when the social environment surrounding it shifts. That lesson has renewed relevance as fresh unrest shakes Iran today — and it should
As the new year dawns, Taiwan faces a range of external uncertainties that could impact the safety and prosperity of its people and reverberate in its politics. Here are a few key questions that could spill over into Taiwan in the year ahead. WILL THE AI BUBBLE POP? The global AI boom supported Taiwan’s significant economic expansion in 2025. Taiwan’s economy grew over 7 percent and set records for exports, imports, and trade surplus. There is a brewing debate among investors about whether the AI boom will carry forward into 2026. Skeptics warn that AI-led global equity markets are overvalued and overleveraged
RSS