Taiwan: Q4 economic growth moderates
February 17, 2011
In the fourth quarter, GDP rose 6.9% over the same period the previous year, according to the estimate published on 17 February, which was above the advance estimate of 6.5% published on 31 January. The reading was below the revised 10.7% expansion recorded in the third quarter (previously reported: +9.8% year-on-year) but exceeded market analyst expectations that the economy would expand 6.4%. The fourth quarter deceleration mainly reflected slower growth in the domestic and external sector. Private consumption slowed from a 4.6% annual increase in the third quarter to a 2.8% expansion. Therefore, domestic demand decelerated to 5.1%, exactly half of the 10.2% expansion registered in the third quarter. Exports of goods and services grew 14.9% (Q3: +20.5% yoy), while imports expanded 14.4% (Q3: +22.3% yoy). The net contribution from the external sector to overall growth improved from a 1.9 percentage points contribution in the third quarter to a 2.3 percentage points contribution in the fourth. A quarter-on-quarter comparison does not corroborate the growth suggested by the annual figures, as the economy remained flat over the previous quarter in seasonally adjusted terms (Q3: +0.8% qoq). For the full year 2010, GDP expanded a robust 10.8%, which contrasted the 1.9% contraction in 2009 and exceeded the government forecast of a 10.0% expansion. Owing to the solid global economic forecast for 2011, the government expects exports and private consumption to sustain economic growth at 4.9% this year.