Taiwan: Economic growth maintains pace of expansion
April 30, 2014
In the first quarter, GDP increased 3.0% over the same quarter last year according to official data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on 30 April. The reading matched the 3.0% expansion registered in the fourth quarter and was on par with market expectations.
Q1's result showed that the external sector improved, while domestic demand softened. Private consumption increased 2.9% in Q1, which was below Q4's 3.3% expansion. Government spending contracted 1.2% in Q1, which contrasted the 0.4% increase registered in Q4. In addition, gross investment deteriorated notably in the first quarter (Q1: -0.3% year-on-year; Q4: +9.2% yoy).
On the external front, exports of goods and services increased 3.7% in Q1, which was slightly slower than the 4.0% expansion recorded in Q4. Imports decelerated sharply from a 6.1% increase in Q4 to a 2.1% expansion in Q1. As a result, the external sector's net contribution to overall economic growth swung from minus 0.2 percentage points in Q4 to plus 1.6 percentage points in Q1.
On a sequential basis, GDP rose 0.3% over the previous period in seasonally-adjusted terms, which came in well below the 1.8% increase observed in the fourth quarter.
The government sees GDP expanding 2.82% in 2014. FocusEconomics Consensus Forecast panelists project GDP to grow 3.2% this year, which is unchanged from last month's forecast. For 2015, the panel estimates that economic activity will increase 3.6%.
Author: Ricardo Aceves, Senior Economist