The economy expanded at a faster pace of 3.3 percent last quarter, allowing the Directorate-General of Budget, Accounting and Statistics (DGBAS) to raise its growth forecast for this year to 2.69 percent, as export outlook remained healthy, despite heightened uncertainty.
The revision came after the official statistics agency factored in the ongoing trade disputes that have prompted international research bodies to trim world growth rates.
“The economy stays on an uphill course, judging from the quarter-to-quarter readings,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference.
The seasonally adjusted annual growth rate, which is a better gauge of economic turnarounds, was 1.62 percent for the April-to-June period, and is forecast to advance at 2.25 percent this quarter and 3.4 percent next quarter, the DGBAS report said.
That suggested that growth momentum would increase further, although the growth rates might look less impressive if compared with figures from a year earlier, due to a high base, Chu said.
Stronger exports and weaker imports resulted in net external demand making a greater contribution to GDP growth than lackluster private consumption and investment, he said.
Sturdy demand for electronic components and new technologies has benefited local firms in the supply chain of global technology brands, the statistics minister said, adding that demand should grow with the arrival of the high-sales season.
Global smartphone vendors usually launch new-generation devices in September to take advantage of upcoming holidays.
However, the DGBAS cut private investment growth by 0.35 percentage points to 4.26 percent this year, after it dragged the economy by 0.53 percentage points last quarter.
Taiwan Semiconductor Manufacturing Co (台積電), which supplies chips to Apple Inc, did not spend as much on capital equipment, probably because it had bought enough last year, Department of Statistics Director-General Yeh Maan-tzwu (葉滿足) said, adding that the firm might become more active in the second half of this year based on its earnings guidance last month.
The DGBAS also lowered its growth projection for private consumption by 0.06 percentage points to 2.47 percent due to concerns over the volatility of global financial markets.
That said, domestic demand is expected to hold up the economy in the second half of the year, Chu said.
The TAIEX gained 8.27 percent last quarter and daily turnover grew by 56.61 percent, while retail sales increased 4.58 percent, restaurant revenue grew 5.42 percent and outbound travelers picked up by 8.91 percent — all favorable signs for domestic demand, he said.
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