The nation’s economy fared better than expected in the fourth quarter on the back of stronger domestic and foreign demand, a report released by the Directorate-General of Accounting, Budget and Statistics (DGBAS) showed yesterday.
The GDP expanded 6.48 percent in the October-to-December period, from the same period a year earlier, as recovering employment boosted consumer confidence at home, while overseas demand for Taiwanese electronics proved stronger amid the global economic stabilization, the report said.
The performance was 1.78 percentage points higher than the 4.7 percent growth the statistics agency predicted in November last year.
The agency also raised its GDP growth forecast for this year to 5.03 percent, from a 4.51 percent expansion, citing better US economic recovery and healthy growth momentum in China, India and other emerging economies.
Starting this year, the DGBAS is to update major economic data for last month, April, July and October, in addition to the original quarterly briefing this month, May, August and November, to better inform the public of the nation’s economic condition.
“Domestic demand lifted GDP by 3.81 percentage points in the fourth quarter as seen by marked improvement in consumer spending,” the report said.
Fourth-quarter private consumption increased 2.94 percent with retail and food business gaining 5.5 percent and 10.52 percent respectively, while credit card charges increased 10.88 percent for the months of October and November, the report said.
The agency attributed the improvement to falling jobless rates and wage recovery.
External demand contributed 2.67 percentage points in the fourth quarter on solid demand from major trade partners for consumer electronic products, the report said.
Taiwan is a major exporter of semiconductors, flat panels and personal computers.
Exports increased 14.36 percent in the fourth quarter in New Taiwan dollar terms, while imports grew 20.66 percent, the report said, adding that some imports were intended for export purposes.
In all, the GDP expanded 10.47 percent last year, from a year earlier, the best showing since 1987 when economic growth hit 10.68 percent, and 0.49 percentage points higher than the November forecast, the report said.
The robust economy did not sharpen inflationary pressures last year as the consumer price index rose a minute 0.96 percent, the report said, milder than the 0.98 percent estimate two months earlier.
The inflation gauge is expected to climb to 2.04 percent this year, from 2.01 percent last projected, as rising raw material and oil costs are likely to push up food and energy prices, the report said.
However, the gain in the New Taiwan dollar and price-stabilizing measures will help ease the inflationary pressure, the report said.
Donna Kwok (郭浩庄), an economist at HSBC in Asia, said yesterday she expected the central bank to continue the normalization monetary policy this year to curb property price inflation and pre-empt the transmission of rising global commodity prices.
“The next rate hike is coming in March,” Kwok said in a statement. “The upside risk to our call for a 12.5 basis point adjustment each quarter is rising.”