Taiwan: Economy cools down in Q3
October 31, 2013
In the third quarter, GDP rose 1.6% over the same period last year, according to the advance estimate released on 31 October. The reading came in well below both the revised 2.5% expansion recorded in the second quarter and market expectations of a 2.6% increase.
The performance in the third quarter was the result of a slowdown in the external sector, while domestic demand improved slightly. Private consumption slowed to a 1.6% rise in the third quarter (Q2: +1.7% year-on-year), and public spending contracted at a faster 0.8% (Q2: -0.2% yoy). On the other hand, gross investment rebounded to a 1.0% expansion, contrasting the 2.8% decline tallied in Q2.
On the external side of the economy, exports of goods and services increased 1.7% (Q2: +5.2% yoy), while imports expanded a softer 1.1% (Q2: +3.2% yoy). As a result, the external sector's net contribution to overall growth deteriorated from 2.1 percentage points in Q2 to 0.7 percentage points contribution in Q3.
On a quarterly basis, GDP rose a meager 0.1% over the previous period in seasonally-adjusted terms, which was down from the 0.6% expansion observed in the second quarter.
The government sees GDP expanding 2.3% in 2013 and 3.4% in 2014. FocusEconomics Consensus Forecast panelists project GDP to grow 2.4% this year, which is unchanged from last month's forecast. For 2014, the panel estimates that economic activity will increase 3.5%, which is down 0.1 percentage points from last month's projection.