Taiwan's gross domestic product (GDP) rose 2.06 percent in the third quarter year-on-year, beating an earlier forecast of 1.99 percent made in August, according to an advance estimate from the Directorate General of Budget, Accounting and Statistics (DGBAS) released on Friday.
The DGBAS said that the higher than expected GDP growth for the July-September period largely reflected stronger private consumption as well as capital formation, though export growth was lower than previously forecast due to the reduced number of business days caused by a series of typhoons.
In the wake of the better than expected GDP figure in the third quarter, Taiwan's economy is expected to grow a minimum of 1 percent in 2016, the directorate said.
Third quarter GDP growth was the highest recorded quarterly growth since the first quarter of 2015, when the figure stood at 4.04 percent.
According to the August forecast made by the DGBAS, Taiwan's GDP will grow 1.22 percent in 2016, with growth for the fourth quarter likely to hit 2.38 percent. Boosted by third quarter growth, DGBAS specialist Huang Wei-chieh (???) said that the country's economy could grow 1.24 percent this year even if the fourth quarter figure is in line with the estimate.
The government agency is scheduled to release an updated estimate for annual GDP growth on Nov. 25.
The DGBAS said private consumption in the third quarter grew 2.37 percent from a year earlier, well above an earlier forecast of 1.54 percent, which lifted GDP by 1.24 percentage points for the quarter.
The higher than expected private consumption came from stronger sales in the auto market, where car sales grew 6.83 percent, while increased revenue from tolls on the country's highways reflected the fall in international crude oil prices and gave an additional boost to private consumption, the DGBAS said.
In addition, retail sales returned to growth in the third quarter after falling for the previous two quarters, while spending also increased on food and beverages, the DGBAS said. In terms of capital formation, the local semiconductor sector has invested in high-end technology processes and several airline carriers expanded the size of their fleets, which helped local investment grow 3.24 percent, beating an earlier forecast of 2.79 percent, the GDBAS said.
However, after inflationary adjustments real exports of merchandise and services in the third quarter grew only 3.57 percent, failing to meet an earlier forecast of 4.50 percent, largely reflecting the loss of business days due to bad weather, according to DGBAS data.
The data indicated that imports of merchandise and services grew 5.14 percent in the third quarter, higher than an earlier forecast of 4.48 percent, largely due to an increase in capital equipment imports.
By taking exports and imports into account, net foreign demand dragged down Taiwan's GDP growth by 0.35 percentage points, the DGBAS said.
Source: Focus Taiwan News Channel