Taiwan’s economy grew 2.91 percent last quarter, stronger than the government’s August forecast of 2.67 percent, as exports benefited from trade rerouting and private consumption lent support, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The expansion was the biggest in five quarters, allowing the agency to raise its growth forecast for this year. Having predicted that the economy would expand 2.46 percent this year and 2.58 percent next year, the DGBAS is due to update its projections on Nov. 29.
Last quarter’s performance also pushed Taiwan out ahead of its major trade rivals in the region, as Hong Kong posted a 2.9 percent decline, Singapore had 0.1 percent growth and South Korea showed a 2 percent pickup.
External demand contributed 1.58 percentage points to the latest GDP readings, although exports in US dollar terms contracted 0.81 percent from a year earlier, the DGBAS said in a report.
Demand for electronics used in smartphones and other consumer technology products stayed resilient, but not strong enough to mute business retreats seen in non-tech sectors.
Many of Taiwan’s largest contract chipmakers, chip designers and related device suppliers gave positive business guidance, citing stronger demand for next-generation smartphones and deployment of 5G gadgets.
By contrast, falling prices for oil and raw materials weighed on imports, which declined 3.19 percent in US dollar terms during the July-to-September period, allowing net external demand to register a 2.17 percent increase, the report said.
Trade rerouting also helped, as firms cut reliance on imports for the production of goods destined for overseas markets, a statistics official said, adding that the trend is favorable for Taiwan.
On the domestic front, private consumption gained 1.96 percent year-on-year last quarter, but capital formation declined 1.01 percent in the period, the report said.
Retail sales and restaurant revenue last quarter picked up 4.67 percent and 3.81 percent respectively, aided by the launches of new cars and scooters, as well as promotional campaigns by department stores, it said.
Investment related to construction and civil engineering projects slowed, obscuring capital equipment purchases by local semiconductor firms seeking to upgrade their global technology leadership, it said.
A high comparison base last year also accounted for the poor showing, it said.
Private investment would accelerate thanks to the Ministry of Economic Affairs approving 142 applications from firms seeking to return home from China to avoid punitive tariffs imposed by Washington on Chinese goods, the agency said.
Exports among those firms rose 15 percent and capital equipment imports soared 40 percent, outperforming their peers, the agency added.
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