Taiwan: Economy accelerates in Q4
January 28, 2014
In the fourth quarter of 2013, GDP rose 2.9% over the same period of the previous year according to the advance estimate released on 28 January. The reading came in above both the revised 1.7% expansion recorded in the third quarter and market expectations of a 1.8% increase. More detailed data will be made available on 27 February.
The Q4 increase was the result of an improvement in domestic demand conditions, whereas the external sector's performance deteriorated. Total consumption expanded 2.7% over the same quarter of the previous year (Q3 2013: +1.0% year-on-year). In particular, private consumption accelerated to a 3.3% rise in the fourth quarter (Q3: +1.5% yoy), which marked the strongest expansion since Q3 2011. In turn, public spending expanded a meager 0.1% in Q4, marking an improvement over the 1.2% contraction tallied in Q3. In addition, gross capital formation soared from the 0.8% rise tallied in Q3 to a 9.7% expansion.
On the external side of the economy, exports of goods and services increased 4.0% (Q3: +1.7% yoy), while imports expanded a stronger 6.1% (Q3: +0.7% yoy). As a result, the external sector's net contribution to overall growth swung from plus 0.9 percentage points in Q3 to a minus 0.2 percentage point contribution in Q4.
The government sees GDP expanding 3.4% in 2014. FocusEconomics Consensus Forecast panelists project that GDP will grow 3.3% in 2014, which is down 0.1 percentage points from last month's forecast. For 2015, the panel estimates that economic activity will accelerate to 3.8%.