Taiwan's GDP more than quadrupled in the second quarter, climbing to 3.98 percent on improved performance in the foreign information technology and telecommunications sectors, the government announced yesterday.
The Directorate General of Budget, Accounting and Statistics estimated that GDP growth for the third and fourth quarters would be 4.06 percent and 3.34 percent, respectively.
The second-quarter growth rate represented a more than quadruple expansion over the first quarter's 0.89 percent, while the annual rate climbed from 2.55 percent to 3.14 percent, according to the DGBAS.
Economists said that while the upward adjustment of the annual growth rate was justified due to improved sales by electronics manufacturers, any further positive adjustments would be unlikely.
"External demand continues to be buoyant and it's the key driver. The current account surplus is also important and a strong currency means a strong economy," said Neal Stovicek, head of international research at SinoPac Securities Corp (建華證券).
But, overseas demand may fade in the latter half of the year, keeping the predictions of the GDP growth rate stable.
"Looking for guidance in the US economy, we can see that will be the last of upward revisions for some time," said David Loomis, chief strategist for Primasia Securities Corp in Taipei.
"A lot of leading indicators in recent months are topping out. At least the upward momentum appears to have slowed, suggesting growth may tapper off as the year goes on," he said.
The nation's economy is expected to grow 3.46 percent in 2003, while GDP last year was revised to a 2.18 percent decline, up from the previous estimate of a 1.91 percent drop, according to the DGBAS.
Domestic demand is expected to remain sluggish this year, with DGBAS predicting private consumption to grow 2.2 percent and private investment to rise just 0.7 percent. The consumer price index is expected to rise 0.31 percent this year, down from an earlier forecast of 0.64 percent, it said.
DGBAS also revised upward its exports forecast for the year to grow 5.4 percent from 3.4 percent it predicted earlier. It also changed its forecast for imports to grow 6.1 percent this year from an earlier forecast of 5.3-percent increase.
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