The government yesterday raised its forecast for this year's economic growth to 5.46 percent after third-quarter growth hit a three-year high, driven by robust electronics exports.
The strong economic growth and the rising risk of inflation encouraged speculation that the central bank will raise benchmark interest rates next month, analysts said.
Third-quarter GDP increased 6.29 percent from last year, exceeding the 4.47 percent estimate in August.
The boost was mostly a result of strong exports to emerging markets such as China and India, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said.
The results outshone most economists' expectations, including Lehman Brothers' forecast of 5.4 percent and Citigroup's 5.1 percent.
"We are surprised by the export contribution to Taiwan's GDP. We believe the central bank's decision will reflect this [strong economic data]," said Cheng Cheng-mount (
Exports contributed 3.1 percentage points to the quarter growth figure, compared with the 1 percentage point the DGBAS said it had expected.
As economic growth in the third quarter was so strong, the central bank will have more leeway to tighten its monetary policy amid greater inflation risk, Cheng said.
The DGBAS yesterday forecast that GDP would rise to 5.46 percent this year at an annual rate, from its previous estimate of 4.58 percent. It also raised its estimate for the annual increase in the consumer price index (CPI) to 1.65 percent from 1.48 percent for this year.
The central bank may raise key interest rates by another 25 basis points in the upcoming quarterly meeting, following 12 straight quarterly hikes, Cheng said.
The rediscount rate, which the central bank charges local commercial banks for loans, rose to 3.25 percent.
"More and more economic data is on the side of the central bank, which hopes to increase interest rates to boost the real rate to a neutral level," said Liang Kuo-yuan (
The good news dispelled worries that economic growth could be cooling, Liang said, but added that inflationary pressure was rising and capital outflow was a lingering problem.
Liang said he did not rule out the possibility of a 0.25 percentage point hike, compared with his previous forecast of 0.125 percentage points.
Looking into the final quarter of the year, DGBAS forecast GDP would expand 5.43 percent on the back of sustaining export momentum and stable private consumption.
The government agency also raised its estimate for next year's annual economic growth to 4.53 percent from its 4.51 percent estimate. It also said CPI could increase 1.48 percent rather than 1.46 percent.
AGING: As of last month, people aged 65 or older accounted for 20.06 percent of the total population and the number of couples who got married fell by 18,685 from 2024 Taiwan has surpassed South Korea as the country least willing to have children, with an annual crude birthrate of 4.62 per 1,000 people, Ministry of the Interior data showed yesterday. The nation was previously ranked the second-lowest country in terms of total fertility rate, or the average number of children a woman has in her lifetime. However, South Korea’s fertility rate began to recover from 2023, with total fertility rate rising from 0.72 and estimated to reach 0.82 to 0.85 by last year, and the crude birthrate projected at 6.7 per 1,000 people. Japan’s crude birthrate was projected to fall below six,
Conflict with Taiwan could leave China with “massive economic disruption, catastrophic military losses, significant social unrest, and devastating sanctions,” a US think tank said in a report released on Monday. The German Marshall Fund released a report titled If China Attacks Taiwan: The Consequences for China of “Minor Conflict” and “Major War” Scenarios. The report details the “massive” economic, military, social and international costs to China in the event of a minor conflict or major war with Taiwan, estimating that the Chinese People’s Liberation Army (PLA) could sustain losses of more than half of its active-duty ground forces, including 100,000 troops. Understanding Chinese
US President Donald Trump in an interview with the New York Times published on Thursday said that “it’s up to” Chinese President Xi Jinping (習近平) what China does on Taiwan, but that he would be “very unhappy” with a change in the “status quo.” “He [Xi] considers it to be a part of China, and that’s up to him what he’s going to be doing, but I’ve expressed to him that I would be very unhappy if he did that, and I don’t think he’ll do that. I hope he doesn’t do that,” Trump said. Trump made the comments in the context
SELF-DEFENSE: Tokyo has accelerated its spending goal and its defense minister said the nation needs to discuss whether it should develop nuclear-powered submarines China is ramping up objections to what it sees as Japan’s desire to acquire nuclear weapons, despite Tokyo’s longstanding renunciation of such arms, deepening another fissure in the two neighbors’ increasingly tense ties. In what appears to be a concerted effort, China’s foreign and defense ministries issued statements on Thursday condemning alleged remilitarism efforts by Tokyo. The remarks came as two of the country’s top think tanks jointly issued a 29-page report framing actions by “right-wing forces” in Japan as posing a “serious threat” to world peace. While that report did not define “right-wing forces,” the Chinese Ministry of Foreign Affairs was
RSS