Taiwan’s economy last quarter grew 4.94 percent, the fastest increase in nearly a decade, beating the 3.28 percent expansion forecast by the government in November last year, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The expansion came on the back of strong exports, the agency added.
Telecommuting and distance learning, and new technology applications, spurred external demand, adding 5.12 percentage points to GDP growth last quarter, national income section official Wu Pei-shuan (吳佩璇) told a media briefing in Taipei.
However, private consumption and capital formation fell, while government expenditure only contributed 0.71 percentage points, the agency’s advance report showed.
Exports grew 11.73 percent last quarter from a year earlier in US dollar terms, driven mainly by semiconductors, and information and communications technology products, Wu said, adding that local suppliers had to expand capacities to meet demand.
Global demand for Taiwanese non-technology products also increased, as customers expanded inventory in expectation of a recovery from the COVID-19 pandemic, she said, citing higher prices for raw materials and metal products.
Major technology firms have offered optimistic earnings guidance for this quarter and aggressively increased capital spending for this year, reflecting confidence in their business prospects.
Private consumption declined 1.1 percent, easing from a 1.48 percent retreat in the third quarter of last year, although retail sales and dining revenues gained 2.42 percent and 1.15 percent respectively, the report showed.
Wu attributed lackluster consumption to a deeper plunge in foreign tourist arrivals, as authorities worldwide tightened travel restrictions to contain spikes in COVID-19 cases.
Passenger income contributions at airlines dwindled 90.51 percent, while other public transportation service providers also took a hit, Wu said.
Private consumption would have fared worse if not for enthusiastic stock trading that inflated fee income for securities brokerages and benefited securities houses, she said.
The government increased spending by 4.77 percent last quarter, and would continue to lend support to physical and digital infrastructure development, Wu said.
Capital formation, a gauge of corporate investment interest, contracted 1.4 percent due to less active imports of capital equipment and lower inventory, she said.
However, domestic firms, especially chipmakers, are eyeing capacity expansion, encouraged by a critical shortage of semiconductors in international industries, Wu added.
For the whole of last year, GDP growth rose 2.98 percent, stronger than the agency’s projection of 2.54 percent published in November, she said.
The preliminary reading showed that Taiwan was the best performer among the world’s mature economies last year, above China, which posted 2.3 percent GDP growth, Wu said.
The agency would update its growth forecast next month, after it received more economic data, Wu added.
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