GDP growth was 2.1 percent in the second quarter, missing the government’s May forecast by 0.04 percentage points as foreign trade and private investment slowed, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The lackluster showing might prove both seasonal and short-lived, as exports have regained growth momentum in the current quarter and are likely to accelerate through the rest of the year, an economist said.
“The landscape looks fair moving forward, despite lingering uncertainty... The chance of downward GDP adjustment is slim unless downside risks materialize,” Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) economist Gordon Sun (孫明德) said by telephone.
Apple Inc’s next iPhone, which marks the product’s 10th anniversary, poses the biggest uncertainty, as Taiwanese technology firms supply its chips, casing, camera lens, batteries, touchpanels and other components.
Strong sales would benefit local suppliers, but a delayed launch or poor reception might dampen their earnings, Sun said.
Exports increased 10.22 percent during the second quarter, driven by global demand for electronic components, the DGBAS report showed.
However, exports, including services, grew only 4.96 percent, softer than the 5.29 percent forecast in May, as a decline in the number of Chinese tourists continued to weigh on the economy, the report said.
Imports were also slightly weaker as local firms refrained from purchasing capital equipment amid sluggish sales, the report said.
Altogether, external demand contributed 0.9 percentage points to GDP growth last quarter.
On the domestic front, the second quarter saw a modest retreat in the number of new cars, as well as oil-based products and retail sales, the report said.
However, a drastic increase in stock and fund transactions, and outbound travel more than offset the decline and lifted private consumption 1.99 percent, higher than the forecast in May.
Capital formation registered a meager 0.08 percent increase, compared with the 1.27 percent gain forecast in May, as local semiconductor companies and airlines turned cautious on capital spending, the report said.
“The figures came as no surprise. The TIER will stand by its growth forecast and so will other research institutes,” Sun said.
The seasonally adjusted annual rate expanded a mild 0.59 percent last quarter, much slower than the 3.82 percent increase in the first quarter, suggesting the economy has plateaued this year.
The DGBAS plans to update its growth forecast next month.
By sector breakdown, manufacturers put in the strongest performance last quarter with a 3.86 percent increase, followed by transportation and logistics providers with a 3.2 percent gain, the report said.
The retail and wholesale sectors posted 2.95 percent growth.
Building companies and power suppliers reported a business contraction, as expectations of lower property prices continued to sideline developers and a relatively low average temperature cut demand for electricity, the report said.
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