Taiwan: Economy grows less than expected in Q1
April 30, 2013
In the first quarter, GDP rose 1.5% over the same period last year, according to the advance estimate released on 30 April. The reading came in below the 3.7% expansion recorded in the last quarter of 2012 and the former 3.3% February's GDP growth estimate. In addition, the print undershot market expectations of a 3.1% increase.
The deceleration in the first quarter was the result of a deterioration in both domestic demand and the external sector. Private consumption expanded a meagre 0.4% (Q4 2012: +1.6% year-on-year). On the other hand, gross investment - which includes changes in inventories - accelerated from a 9.0% expansion in Q4 to a 10.6% increase. Overall, domestic demand decelerated to 2.2% in Q1, down from the 2.5% rise recorded in the previous period.
On the external side of the economy, exports of goods and services grew 4.8% (Q4: +4.0% yoy) while imports expanded a stronger 6.9% (Q1: +2.2% yoy). As a result, the net contribution from the external sector to overall growth worsened from a 1.8 percentage-point contribution in the fourth quarter to minus 0.3 percentage points in the first.
On a quarterly basis, GDP contracted 0.8% over the previous period in seasonally adjusted terms, which contrasted the 1.8% rise observed in the fourth quarter of 2012. More detailed data will be published on 24 May.
The government sees GDP expanding 3.6% in 2013. FocusEconomics Consensus Forecast panellists project GDP to grow 3.5% this year, which is unchanged from last month's forecast. For 2014, the panel estimates economic activity will increase 4.0%.