Taiwan: Economic growth picks up momentum in Q2
July 31, 2014
In the second quarter, GDP increased 3.8% over the same period last year, according to official data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on 31 July, and marked the fastest expansion since Q4 2012. The reading overshot both the 3.1% increase tallied in Q1 and the 3.2% expansion the markets had expected.
Q2’s improvement came on the back of strong growth in domestic demand. Total consumption increased 2.4% annually in Q2 (Q1: +2.2% year-on-year) stemming from an acceleration in government spending (Q2: +1.2 yoy; Q1: -0.7% yoy). Meanwhile, growth in private consumption in Q2 kept virtually the same pace as in Q1 (Q2: +2.6 yoy; Q1: +2.7% yoy). Gross fixed investment improved notably in the second quarter (Q2: +6.8% yoy; Q1: +1.8% yoy).
On the external front, exports of goods and services increased 4.5% annually in Q2, which was stronger than the 3.9% expansion tallied in Q1. Imports accelerated from a 1.9% increase in Q1 to a 3.9% expansion in Q2. The external sector’s net contribution to overall economic growth was 1.2 percentage points in Q2. The reading was slightly below the 1.8 percentage-point contribution registered in Q1.
On a sequential basis, GDP rose 1.5% over the previous period in seasonally-adjusted terms, which came in well above the 0.5% increase observed in the first quarter.
Author: Ricardo Aceves, Senior Economist