Taiwan: Economy slows in third quarter
November 24, 2011
In the third quarter, GDP rose 3.4% over the same period last year, the slowest pace of expansion seen since the final quarter of 2009, according to preliminary estimates. The reading was unchanged from the advance estimate, but came in below the revised 4.5% expansion in the second quarter (previously reported: +5.0% year-on-year). According to the press release, the deceleration came on the back of weaker domestic demand. Gross fixed investment plunged 10.7% annually (Q2: +1.4% yoy), whereas private consumption expanded 3.1%, virtually unchanged from the 3.0% expansion witnessed in the second quarter. As a result, the domestic sector's contribution to overall economic growth swung from plus 1.8 percentage points in the second quarter to minus 0.4 percentage points in the third. In contrast, the external sector's contribution improved from 2.7 percentage points in Q2 to 3.9 percentage points in the third quarter, as imports of goods and services contracted 3.9% (Q2: +1.8% yoy), while exports expanded 2.1% (Q2: +4.9% yoy). A quarter on quarter comparison points to an even deeper slowdown, as GDP contracted 0.1% over the previous quarter, contrasting the 0.6% expansion in the second quarter. Owing to slightly weaker domestic demand, the government revised its GDP forecast for this year marginally downwards, from 4.6% to 4.5%. For 2012, the government expects the economy to expand 4.2%.