The economy expanded 2.99 percent year-on-year last quarter and could accelerate to 3.04 percent growth this quarter, as trade rerouting and 5G technology facilitated an increase in private investment, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Private investment, which rose 4.79 percent year-on-year during the third quarter, could register 7.61 percent growth this year, the fastest in seven years, as global technology companies seek to tap new 5G-related business with help from local chipmakers, IC designers and other critical component suppliers, the agency said.
That prompted the agency to raise its forecast for GDP growth this year to 2.64 percent and 2.72 percent for next year, up from 2.46 percent and 2.58 percent growth it forecast in August.
“It is difficult to separate contributions from supply chain realignment and 5G deployment if such breakdown is necessary or meaningful,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference in Taipei.
Critics have questioned government reports that it has secured more than NT$700 billion (US$22.94 billion) of investment under its “invest Taiwan” program, which aims to help local firms cope with the US-China trade dispute.
The program had only added 0.3 percentage points to the growth forecast, Chu said, adding that some firms had relocated manufacturing facilities last year or earlier this year before joining the program to qualify for bank credits, lenient foreign labor requirements and other benefits.
Stronger private investment helped offset weaker exports that could contract 1.61 percent this year, instead of the 1.24 percent contraction previously forecast, Department of Statistics Director Tsai Yu-tai (蔡鈺泰) said.
Cheaper crude oil and raw material prices weighed on outbound shipments, despite a larger volume of exports, Tsai said.
The situation is likely to improve next year when exports could post a 3.12 percent increase, in line with an expected pickup in global trade flows, Tsai said.
State-owned enterprises would lend support with a 16.91 percent increase in investment next year, led by Taiwan Power Co (Taipower, 台電) and CPC Corp, Taiwan (CPC, 台灣中油), the agency said.
Taipower’s offshore wind farms would bolster the figure, while CPC plans to build a natural gas terminal in Kaohsiung to help ensure a stable electricity supply, it said.
Private consumption lagged behind expectations last quarter and this year, as people turned conservative about spending amid economic uncertainty, the agency said
Daily turnover on the stock market last quarter contracted 9.77 percent from a year earlier, it said.
Consumer spending is forecast to edge up 2 percent this year and 2.02 percent next year, as an aging population and a low birthrate are unfavorable for GDP growth, it added.
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