The economy expanded at a faster-than-expected rate of 6.92 percent last quarter amid robust exports, bringing GDP growth last year to a 24-year high of 10.82 percent, the Directorate-General of Accounting, Budget and Statistics (DGBAS) said yesterday.
The growth rate was higher than the government agency’s forecast of 6.48 percent annual growth in the fourth quarter, prompting the DGBAS to trim its GDP forecast this year to 4.92 percent, from the 5.03 percent estimated last month.
“Exports and private consumption will keep growing this year, but the higher base from last year has made it more difficult to sustain the growth momentum,” Directorate-General of Budget, Accounting and Statistics Minister Shih Su-mei (石素梅) said.
However, Tsai Hung-kun (蔡鴻坤), director of the DGBAS’ statistics division, said the government might raise its economic growth forecast given rising orders for electronics products.
Exports are expected to hit a record-high US$306.8 billion this year, up 11.72 percent from last year’s US$274.6 billion, as the global economic recovery pushes up demand for Taiwanese electronics, the DGBAS said.
Domestic private consumption is also forecast to expand 3.85 percent this year, bolstered by lower unemployment and higher salaries.
Fixed investment is projected to edge down 1.81 percent but remain over NT$2 trillion (US$67.95 billion) as DRAM and TFT-LCD companies slow their investment plans, the agency’s report showed.
“The signing of the Economic Cooperation Framework Agreement (ECFA) will lead to a further rise in Taiwanese exports, while the rising number of Chinese visitors will push up domestic consumption,” both of which will boost Taiwan’s economic growth this year, said Ma Tieying (馬鐵英), a Singapore-based economist at DBS Bank (星展銀行).
DBS Bank has a more conservative projection of GDP growth for the year, placing it at 4.1 percent. It also estimated that the economy rose 10.5 percent last year, also lower than the DGBAS’ forecast of 10.82 percent.
However, inflation would quicken to 2 percent this year, compared with last year’s 0.96 percent.
The wholesale price index (WPI) is expected to expand 2.23 percent this year as the New Taiwan dollar’s appreciation would partly offset rising commodity prices, DGBAS said. The WPI surged 5.45 percent last year.
To reduce inflation risk, the central bank is likely to increase key interest rates by 25 basis points every quarter this year, Ma said.
The DGBAS also reported that third-quarter GDP growth on a seasonally adjusted basis rose to 10.69 percent from the 9.8 percent reported last year, amid higher exports and private investment.