World Economy

Taiwan Fortunes Brighten

Taiwan Fortunes BrightenTaiwan Fortunes Brighten

Taiwan posted unexpectedly strong economic growth in the third quarter—its fastest in 2-1/2 years, boosted by tech exports that will likely sustain momentum over the coming quarters.

The island’s fortunes have brightened this year due to the rollout of new smartphone models such as Apple Inc’s iPhone and other tech gadgets, and fiscal spending is also expected to pick up on government infrastructure projects, Reuters reported.

Gross domestic product expanded 3.11% in the July-September period from a year earlier, data showed on Tuesday. Growth beat a 2.15% median forecast in a Reuters poll and revised 2.13% growth in the second quarter.

On a seasonally adjusted and annualized basis, the economy grew 7.45% in the third quarter, accelerating from 0.47% growth in the second quarter.

“Factoring in the gradual momentum generated by Apple’s new products we estimate economic growth before the end of the year should be quite good,” said Carl Liu, an analyst at KGI Investment Advisory.

The statistics agency said various consumer electronics saw a wave of shipped goods due to the global economic recovery and peak season. Third quarter export goods denominated in US dollars increased by 17.52%, it added.

Some analysts have suggested that the economic momentum in Taiwan generated by tech gadgets would extend into 2018 as exports rise through the holiday season.

Economic growth for the rest of the year will partly 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.

The economy is also expected to get a lift next year from the government’s infrastructure spending plans, according to Woods Chen, an analyst with Yuanta Investment Consulting.

That is expected to stimulate domestic demand, with the expectation that the central bank will leave interest rates unchanged into the first half of 2018, he said.

DBS Group said in a research note ahead of the data that there were signs of recovery in the labor market as well as improving consumption, underscored by consumer confidence hitting a 22-month high in September.

Earlier this month, the government raised its 2017 GDP forecast for the third time this year to 2.15% from 2.11%. For 2018, it expects growth of 2.2%, a tick slower than the 2.27% it previously forecast.

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