The economy grew faster than expected in the first quarter amid robust exports and domestic demand, prompting the government to raise its full-year outlook for GDP growth to 5.04 percent, the Directorate-General of Accounting, Budget and Statistics (DGBAS) said yesterday.
That forecast was 0.12 percentage points higher than the 4.92 percent figure the bureau announced in February, DGBAS data showed.
The forecast was lower than the 5.72 percent growth predicted by the Taiwan Institute of Economic Research (台灣經濟研究院) on Thursday, but higher than the 4.29 percent predicted by the Chung-Hua Institution for Economic Research (中華經濟研究院) earlier this month and the 4.78 percent projection made by the Polaris Research Institute (寶華綜合經濟研究院) last month.
The agency also released a preliminary revision of first-quarter GDP growth at 6.19 percent, up from the 5.01 percent forecast made in February, as a robust global recovery boosted Taiwan’s economic expansion.
ABOVE EXPECTATIONS
“Taiwan’s first-quarter economy expanded well above expectation on robust consumption and exports,” Frederic Nuemann, co-head of Asian Economic Research at HSBC, said yesterday in an e-mailed statement.
Real exports grew 10.48 percent from a year earlier in the first quarter, while first-quarter real growth of domestic consumption amounted to 4.81 percent, government data showed.
“Taiwan’s economy remained resilient, despite uncertainty with regard to the exports sector and concerns over disruption to the local supply chain resulting from the recent massive earthquake in Japan,” said Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank, in a statement yesterday.
Improving consumer confidence amid recovery in job market outlook and surging Chinese tourist arrivals also drove up domestic demand, Phoo said.
However, the DGBAS also raised its forecast for inflation this year to 2.18 percent, from 2 percent forecast in February, on rising global commodities prices.
Meanwhile, the continuing rise of the New Taiwan dollar against the US dollar would help stabilize the inflationary pressure, DGBAS said in its report.
SECOND QUARTER
Cheng Cheng-mount (鄭貞茂), chief economist of Citigroup in Taipei, said in a statement yesterday that headwinds from Japan’s quake disaster, higher commodity prices and shifting demand for electronic products would likely become more significant in the near future, dragging down the second-quarter economic growth.
“But we believe growth momentum will likely rebound in the second half of this year as prices of energy and commodities retreat,” Cheng said.
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