TAIPEI: Taiwan’s economy probably grew for a sixth straight quarter in July-September and at a faster pace, boosted by tech exports on the back of a global economic upswing and recovering consumption. Gross domestic product was forecast to have expanded 2.15 percent in the third quarter from a year earlier compared with 2.10 percent in the previous three months, according to 14 analysts surveyed in a Reuters poll. Earlier this week, the government slightly raised its 2017 economic growth forecast for the third time this year to 2.15 percent from 2.11 percent.
Taiwan’s fortunes have brightened this year on surprisingly robust exports helped by the launches of new smartphone models such as Apple Inc’s iPhone and other tech gadgets. In spite of warnings from the government that export growth would slow due to base effects, September export orders were the highest on record while exports grew at their fastest annual pace in more than 7 years. Information communication devices, in particular, hit a new high in September by volume. Analysts view strong exports and signs of recovery in the labour market as a good omen. “The eventual pick-up in domestic demand, coupled with the strong expansion in exports, augur well for the GDP results in 3Q,” DBS Group Research wrote in a note this week. “There is a good chance that the preliminary estimate of 3Q GDP (due next Tuesday) will deliver pleasant surprises.” With the labour market recovering, consumption has also shown signs of improvement.
The consumer confidence index climbed to a 22-month high of 82.2 in September due to rising expectations over the general economic climate, employment opportunities, household financial conditions and stock market investment prospects, DBS said. Economic growth for the rest of the year could depend on how the strong Taiwan dollar affects exports and Apple’s staggered strategy for rolling out its iPhones. The iPhone X is due to start shipping on Nov. 3. In October, the U.S. Treasury removed Taiwan from its currency “monitoring list” because it had reduced the scale of its foreign exchange interventions since its April 2017 report. Some analysts have suggested the economic momentum in Taiwan generated by tech gadgets would extend into 2018 as exports rise through the year-end holiday season.
