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.
NO LIVERPOOL TRIP: Taiwan’s Lin Yu-ting, who won a gold medal in the boxing at the Paris Olympics, was embroiled in controversy about her gender at that event Taiwanese boxer Lin Yu-ting (林郁婷) will not attend this year’s World Boxing Championships in Liverpool, England, due to a lack of response regarding her sex tests from the organizer, World Boxing. The national boxing association on Monday said that it had submitted all required tests to World Boxing, but had not received a response as of Monday, the departure day for the championships. It said the decision for Lin to skip the championships was made to protect its athletes, ensuring they would not travel to the UK without a guarantee of participation. Lin, who won a gold medal in the women’s 57kg boxing
RESPONSE: The transit sends a message that China’s alignment with other countries would not deter the West from defending freedom of navigation, an academic said Canadian frigate the Ville de Quebec and Australian guided-missile destroyer the Brisbane transited the Taiwan Strait yesterday morning, the first time the two nations have conducted a joint freedom of navigation operation. The Canadian and Australian militaries did not immediately respond to requests for comment. The Ministry of National Defense declined to confirm the passage, saying only that Taiwan’s armed forces had deployed surveillance and reconnaissance assets, along with warships and combat aircraft, to safeguard security across the Strait. The two vessels were observed transiting northward along the eastern side of the Taiwan Strait’s median line, with Japan being their most likely destination,
‘NOT ALONE’: A Taiwan Strait war would disrupt global trade routes, and could spark a worldwide crisis, so a powerful US presence is needed as a deterrence, a US senator said US Senator Deb Fischer on Thursday urged her colleagues in the US Congress to deepen Washington’s cooperation with Taiwan and other Indo-Pacific partners to contain the global security threat from China. Fischer and other lawmakers recently returned from an official trip to the Indo-Pacific region, where they toured US military bases in Hawaii and Guam, and visited leaders, including President William Lai (賴清德). The trip underscored the reality that the world is undergoing turmoil, and maintaining a free and open Indo-Pacific region is crucial to the security interests of the US and its partners, she said. Her visit to Taiwan demonstrated ways the
The US has revoked Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing its production capabilities at that older-generation facility. American officials recently informed TSMC of their decision to end the Taiwanese chipmaker’s so-called validated end user (VEU) status for its Nanjing site. The action mirrors steps the US took to revoke VEU designations for China facilities owned by Samsung Electronics Co and SK Hynix Inc. The waivers are set to expire in about four months. “TSMC has received notification from the US Government that our VEU authorization for TSMC Nanjing
RSS