Taiwan's economy grew at a slower-than-expected rate in the first quarter as lackluster private consumption offset robust exports, a government official said yesterday.
The slight correction would not hinder further economic growth during the rest of the year. Robust exports in the first quarter led the government to raise its gross domestic product (GDP) forecast for the full year to 4.31 percent from the 4.25 percent predicted previously.
"Growth momentum looks quite good for the year as the global economy is moving up which includes Taiwan's major trade partners, the US and China," Hsu Jan-yau (許璋瑤), minister of the Directorate-General of Budget, Accounting and Statistics (DGBAS), told a press conference.
"All the key indicators are moving up except for private consumption," he said.
Nationally, GDP was 4.93 percent during the first quarter, lower than the 5.06 percent estimated in February by the government's statistical agency.
The first-quarter figure of 4.93 percent growth also compares to a 6.4-percent expansion registered during the final quarter of last year, the fastest pace for six quarters, according to DGBAS figures.
"Private consumption is much more sluggish than we expected, primarily because of a sharp drop in automobile sales," Hsu said.
According to statistics compiled by the Ministry of Transportation and Communications, sales of new cars in Taiwan dropped by nearly 25 percent in the first quarter from the same period a year ago.
Private consumption, which makes up about two-thirds of Taiwan's total GDP figure, only increased by 2.07 percent instead of the 2.97 percent projected by the government.
But, the exports of goods and services grew at a faster-than-expected annual rate at 14.1 percent during the first three months, compared to the earlier estimates of 12.1 percent, Hsu said without giving detailed figures.
Manufacturing production, the biggest component of industrial output, also increased rapidly, rising 8.21 percent from a year ago, he said.
But, rocketing crude oil prices and high levels of credit and cash-card debt, which were partly blamed for sluggish personal consumption during the first three months, were concerns, Hsu said.
Cheng Cheng-mount (鄭貞茂), an economist at Citigroup, said he was inclined to keep his forecast unchanged.
"We haven't seen sufficient evidence to lift the forecast," Cheng said.
Cheng predicted that Taiwan's economy would expand by 3.9 percent this year from last year.
"Inflation is the only uncertainty and can erode economic growth," Cheng said.
The government predicted the consumer price index, a tool used to gauge an economy's inflation, would rise moderately by 1.8 percent this year after increasing by 1.35 percent in the January-March period from the same period last year.
Hsu said growth in the CPI would only take away about 0.1 percentage point from the nation's GDP this year as the hikes in energy and electricity prices did not reflect sky-high global oil prices.