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Q4 GDP growth exceeds expectations

The nation's economy accelerated in the fourth quarter last year on stronger-than-expected exports, boosting whole-year GDP growth to 4.09 percent from the previous estimate of 3.8 percent, the government's statistics bureau said yesterday.

Economic growth in the fourth quarter last year hit 6.4 percent, the fastest since the second quarter of 2004, the Directorate General of Budget, Accounting and Statistics (DGBAS) said.

Against this backdrop, the DGBAS raised its economic growth forecast for this year to 4.25 percent, up from its previous prediction of 4.08 percent made in November last year. The new figure is close to the government's target of 4.5 percent growth for this year.

The country's gross national product is expected to reach NT$11.92 trillion (US$368.7 billion), or US$16,208 per capita this year, up from NT$11.43 trillion, or US$15,676 per capita, the DGBAS said in a report released yesterday.

Exports and domestic production were flat in the first half of last year due to slow economic expansion globally and industry migration, the report said. As a result, GDP growth for the first half reached 2.73 percent, it said.

Exports and domestic manufacturing turned stronger in the second half of last year, with robust demand for consumer electronics, as well as improving domestic consumption after the employment rate fell, the DGBAS said.

The bureau predicts that exports will grow 7.6 percent this year from last year, with imports expanding by 5.4 percent from the previous year, with the trade surplus (including all goods and services generated) widening to US$17.1 billion from US$13.7 billion last year.

Although banks are tightening lending to consumers due to snowballing bad loans in the sector, domestic consumption should rise steadily by 3 percent, as unemployment continues to fall, the DGBAS said. The jobless rate fell to a five-year low of 3.86 percent in December last year, according to government statistics.

Private investment is expected to increase by 2.4 percent from last year, with public investment forecast to climb by 2 percent. Investments by state-run enterprises are expected to decline 2.5 percent because of gradual privatization, the report said.

However, with prices of crude oil and industrial raw materials lingering at high levels, the DGBAS raised its full-year inflation forecast to 1.7 percent from 1.5 percent.
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