Taiwan’s economy likely expanded 1.7 percent last quarter, driven in part by technology exports, as global lockdowns and a rising trend in remote work spurred demand for laptops, tablets, and servers, Australia and New Zealand Banking Group (ANZ) said in a report yesterday.
“The tech sector is singularly driving Taiwan’s export performance and is also the focus of the government’s investment drive,” ANZ said.
As a result, the economy is weathering the COVID-19 pandemic better than its peers in the region, it said, adding that the US-China tech decoupling could increasingly benefit Taiwan given its prominent role in Asia’s tech supply chain and its leadership position in advanced fabrication technology.
The Directorate-General of Budget, Accounting, and Statistics is to release advance GDP data for the second quarter today.
Investment was likely the main growth driver during the April-to-June period, with gross fixed capital formation contributing nearly 1.4 percentage points, the report said.
The bank stood by its earlier projection that Taiwan’s economy would rise 1.6 percent this year, with investments adding more than 1 percentage point to the headline, it said.
Taiwan is benefiting from an expected recovery in the semiconductor sector and continued 5G network rollout, which should boost demand for its information and communication, as well as electronic products through the rest of this year and the next, it said.
Taiwan’s tech exports have been relatively more resilient compared with South Korea’s amid the ongoing US-China trade tensions and the pandemic, the report said.
In the first half of this year, Taiwan’s exports edged up 0.5 percent from a year earlier, making it the only economy in Asia to have clocked in positive export growth, the bank said.
Tech exports expanded 15.7 percent, while non-tech exports contracted 14.3 percent during the same period, it said.
In particular, Taiwan’s tech ecosystem is highly driven by demand from US chip design and equipment manufacturers, while leading South Korean tech companies operate via an integrated model, ANZ said.
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