The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its forecast for Taiwan’s GDP growth this year to 5.88 percent, up 0.42 percentage points from its June projection to the highest in 11 years on the back of strong exports.
The growth might moderate to 3.69 percent next year, as global demand for devices for remote working and schooling taper off with the reopening of economies and growing COVID-19 vaccination rates worldwide, it said.
“Although the virus outbreak is taking a toll on consumer activity, exports proved much better last quarter and will remain strong for the rest of the year,” DGBAS Minister Chu Tzer-ming (朱澤民) told an online news conference.
Photo: CNA
Outbound shipments surged 37.5 percent in the April-to-June period, beating the previous prediction of 32.8 percent, the agency’s report showed.
Major technology firms posted robust earnings for last quarter, which is traditionally a slow season for technology products.
Many firms are looking at flat sales for this quarter, despite the coming holiday season, which could be due to customers overbooking to avoid supply shortages amid shipping disruptions and lockdowns in some markets.
The economy grew 7.43 percent in the second quarter, slowing from a revised 9.27 percent upturn for the first quarter, it said.
Foreign trade accounted for 5.14 percentage points and capital formation contributed another 2.14 percentage points, it said.
Tech firms invested in capacity expansions, telecom operators built infrastructure for 5G communications networks and shipping companies acquired containers and vessels to meet a boom in business, it said.
Exports, private investment and government expenditure together more than muted a 0.54 percent decline in consumer spending induced by a level 3 COVID-19 alert and spiking local virus infections in the second quarter, it said.
The government would introduce stimulus measures to energize private consumption once the virus outbreak has subsided, Statistics Department head Tsai Yu-tai (蔡鈺泰) said.
A distribution of consumer vouchers planned by the government could boost GDP growth by 0.3 percentage points, Tsai said.
For the first half of this year, GDP growth reached 8.34 percent and is expected to lose some steam to 3.31 percent in the current quarter and 4.01 percent in the fourth quarter, it said.
The high comparison base last year has much to do with a numerical slowdown for the coming two quarters, the agency said.
Taiwanese chip and printed circuit board suppliers gave positive guidance for their businesses this quarter and beyond, but smartphone assemblers and laptop makers are forecasting flat sales or modest retreats.
For the whole of this year, exports are expected to advance 28.15 percent, while imports might gain 30.96 percent, faster than 20.4 percent and 22.53 percent previously, the DGBAS said.
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