Total revenues earned by all local companies in the wholesale, retail and restaurant sectors rose 8.04 percent to NT$1.05 trillion (US$34.6 billion) last month from a year earlier, after a 7.86 percent rise the previous month, the Ministry of Economic Affairs reported yesterday.
Companies in the wholesale sector registered the biggest annual sales growth, with 10.10 percent last month, followed by the restaurant sector at 6.83 percent and retail at 2.91 percent, the ministry said on its Web site.
In the first five months of this year, the three sectors saw revenues increase 9.07 percent to NT$5.17 trillion from the previous year, with wholesalers registering the largest annual sale increase at 11.33 percent, followed by restaurant owners at 6.77 percent and retailers at 3.71 percent, ministry tallies showed.
“The rise in domestic trade in May was in line with our forecasts,” Sherman Chan (陳穎嘉), a Sydney-based economist at Moody’s Economy.com, wrote in a report released yesterday. “The figure remains impressive, confirming that domestic demand is strong in Taiwan.”
The latest domestic trade figures came amid an improved consumer sentiment in the recent months following the victory of Ma Ying-jeou (馬英九) in the presidential election.
While the consumer price index remained elevated and rose 3.71 percent year-on-year last month — which could prompt the central bank to raise its benchmark interest rate for the 16th straight quarter next week to contain inflationary pressure — Chan said consumer spending in Taiwan had “shown no signs of a slowdown.”
She said that Taiwan’s interest rates were still relatively low compared to the inflation reading, which could encourage consumers to spend more rather than keep their money in bank accounts.
Moreover, the increase in the number of Chinese tourists allowed to visit Taiwan would likely benefit the tourism, retail and hospitality industries, she said.
“The outlook of Taiwan’s retail sector is upbeat,” Chan wrote. “Private consumption is expected to play a larger role in driving economic growth this year.”
Deutsche Bank AG recently raised its economic growth forecast for Taiwan, saying that Ma’s policies, such as increased cross-strait economic ties, the i-Taiwan 12 infrastructure projects and development programs for the services sector, were expected to drive up domestic spending in the years ahead.
In a report released on Wednesday, Deutsche Bank’s Taipei-based analysts led by Julian Wang (王俊朗) said that Taiwan’s total trade surplus would grow at a slower pace this year, given the uncertainty in global demand and rising commodity prices, a condition the new government appears to have identified and intends to address by focusing on domestic consumption to boost the economy.
Against this backdrop, Deutsche Bank said it would revise upward Taiwan’s GDP growth rate to 4.3 percent this year from an earlier estimate of 3.8 percent.
Deutsche Bank’s latest forecast remained lower than the government’s revised 4.78 percent and a 4.5 percent estimate by Goldman Sachs for this year, but was higher than Standard Chartered Bank’s 3.5 percent forecast.
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