Barclays lifts GDP target as ANZ sticks to 3 percent

IMPROVEMENTS::The nation has seen a stronger-than-expected improvement in its GDP growth last quarter on the back of a growing IT industry and stronger exports

By Crystal Hsu  /  Staff reporter

Sat, Feb 02, 2013 - Page 14

Taiwan’s stronger-than-expected GDP growth last quarter has drawn different reactions from foreign institutions: Barclays Capital raised its growth forecast for the nation to 4 percent for this year, while Australian banking group, ANZ stood by its forecast of 3 percent.

The announcements came after the Directorate-General of Budget, Accounting and Statistics on Thursday raised its GDP growth forecast for this year to 3.53 percent, from the 3.15 percent it forecast in November last year, on the back of stronger exports.

“We raised our growth forecast for Taiwan to 4 percent this year, from 3.4 percent we had previously predicted, as the nascent upturn in the IT industry will extend to the PC segment this quarter,” Barclays said.

PC vendors and companies in their supply chain are critical to the health of the manufacturing industry and the nation’s economy because Taiwan is the home to global notebook brands Acer Inc (宏碁) and Asustek Computer Inc (華碩電腦), as well as the world’s top contract makers Quanta Computer Inc (廣達電腦), Compal Electronics Inc (仁寶電腦) and Wistron Corp (緯創).

ENCOURAGING

The global picture is also encouraging, Barclays Capital said, citing on improved semiconductor equipment book-to-bill ratio, which stood at 0.92 in December last year, compared with 0.79 one month earlier.

The uptick suggested chipmakers are investing in new capacity and pointed to a further upside in electronics production in the first half, Barclays Capital said.

“This augurs well for Taiwan as it houses the world’s top two semiconductor foundries,” Barclays said, referring to Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電).

ANZ agreed that Taiwan’s economy is turning the corner and the growth momentum may gain speed, with external demand continuing to improve.

Demand for electronic parts holds up well, thanks to China, and recent trade statistics suggests that demand from the US has also picked up, ANZ said.

However, the bank said it would keep its growth forecast for Taiwan unchanged at 3 percent unless more figures are released that would compel it to publish an upward revision.