Taiwan: Economy slows in third quarter
October 31, 2011
In the third quarter, GDP rose 3.4% over the same period last year, according to a 31 October advance estimate. The reading came in below both the 5.0% expansion in the second quarter and market analysts' expectations of a 3.6% expansion. According to the press release, the deceleration came on the back of weak domestic demand, which offset modest growth in the external sector. Private consumption slowed from a 3.1% annual expansion in the second quarter to a 2.7% increase in the third, while gross fixed investment plunged 13.5% (Q2: +2.4% year-on-year). As a result, the domestic sector's contribution to overall economic growth swung from plus 2.2 percentage points in the second quarter to minus 1.1 percentage points in the third. In contrast, the external sector's contribution improved from 2.8 percentage points in Q2 to 4.5 percentage points in the third quarter, as imports of goods and services contracted 4.8% (Q2: +0.9% year-on-year), while exports expanded 2.2% (Q2: +4.4% yoy) More detailed data will be published on 24 November. Owing to slightly weaker domestic demand, the government revised its GDP forecast for this year marginally downwards, from 4.8% to 4.6%. For 2012, the government expects the economy to expand 4.4%.