Taiwan’s economy grew by 1.58 percent in third quarter

By John Liu, The China Post

TAIPEI, Taiwan — Taiwan had 1.58-percent GDP growth in the third quarter, a 0.89-percent downward adjustment from the previous 2.47-percent prediction made in August, according to a report released by the Directorate-General of Budget, Accounting and Statistics (主計處, DGBAS) yesterday. The GDP growth registered at 1.62 percent in the first quarter, 2.49 in the second quarter, according to DGBAS’s statistics. The DGBAS said that lower-than-expected exports, consumption and investments in the third quarter resulted in the adjustment. Senior DGBAS official Jasmine Mei (梅家瑗) said that the adjustment showed that economic recovery momentum was still not strong enough, indicating a “soft” or “weak” expansion. The new GDP figure did not realize the expectation of “expansion in the second half of 2013,” Mai added. Global Insight in October forecast the world would see 2.4-percent GDP growth in 2013, which means the world is still experiencing slow economic growth, Mei said. Mainland China registered a 7.8-percent GDP growth in the third quarter, while Hong Kong registered a 3.3-percent growth, and Singapore registered a 5.1-percent GDP growth. Institutional Investors’ Opinions The latest GDP figure showed that the economic recovery still lacked momentum, Allianz Global Investors Taiwan Ltd (德盛安聯投信) fund manager Corrina Xiao (蕭惠中) said. Xiao pointed out however, that the recovery track is expected to continue in the future. Xaio said that economic indicators often fluctuate at the beginning of any recovery. While recovery momentum is not as strong in the short-term, the growth trend is expected to continue in mid- and long-term. It may be difficult to see exceptional performance in the short-term, Xiao added. Another fund manager said the stock market is expected to improve, after uncertainties regarding U.S. budget and debt ceiling issues as well as China’s economic structural reform are removed. The stock market still looks good in the long run, he said. Foreign Demand While exports of chemical products, electronic products and plastic products increased in the third quarter, exports of mineral products and optical instruments declined. Exports to the U.S. declined 2.1 percent in the third quarter, while exports to the eurozone grew 4.9 percent, DGBAS official Jasmine Mei (梅家瑗) said. This number indicated that the Europe’s economy has made much improvement compared with a year ago. Imports of capital equipments as well as agricultural and industrial raw materials dropped in the third quarter Domestic Demand Total stock transaction value grew 10.13 percent in the third quarter. The depreciation of the Japanese yen and the Mid-Autumn Festival holidays helped boost local Taiwanese’s travel abroad by 10.57 percent, the report said. Stagnant earnings growth hurt private consumption, which grew 1.56 percent in the third quarter, 0.88 percent below the DGBAS’s previous prediction of 2.44 percent. The low consumption also resulted in mere 1.2-percent and 1.4-percent growth, in the retail and food service sectors, respectively.

In terms of fixed-capital formation, semiconductor manufacturers’ investment in the third quarter dropped compared with a year ago. Last year’s high base period caused the drop, the DGBAS said. Manufacturing Sector Due to new mobile devices rolling out in the market, the electronic parts and components industry experienced a boom in the third quarter. However, computer electronics, optical products, machinery equipments, car parts and components industries experienced decline. All in all, the manufacturing sector grew 1.66 percent in the third quarter.