October 31, 2019 / 9:15 AM / a month ago

UPDATE 1 -Taiwan economy grows 2.91% y/y in Q3, best pace in more than a year

* Taiwan Q3 GDP +2.91 y/y, best pace since Q2 2018

* Returning production from China helps - ministry

* Strong exports boost Q3 growth - economist

TAIPEI, Oct 31 (Reuters) - Taiwan’s economy grew at its fastest pace in more than a year in the third quarter, data showed on Thursday, as a rebound in demand for tech products for the year-end peak season boosted manufacturers and “offset” the impact of trade disputes.

Third quarter gross domestic product for the trade-reliant economy grew 2.91% from a year earlier, preliminary data from the statistics agency showed. That made the July-September quarter the best since 2018’s second quarter, when the economy expanded 3.29%.

That was well above the 2.5% forecast in a Reuters poll and higher than the second quarter’s 2.4%.

Analysts have said demand for high-end smartphones and returning production from Taiwan manufacturers to the island offset the impact from the prolonged trade war between China and the United States, its two largest trading partners.

The statistics agency said real exports in Q3, which includes service and products, rose 4.23% from a year earlier.

Chen Ya-Mei, the ministry’s senior executive officer, said that a boom in foreign tourists to Taiwan also boosted growth despite the travel ban for individual Chinese tourists to the self-ruled island.

Some companies have shifted orders and production to Taiwan from China to avoid higher tariffs, helping to bolster growth in the third quarter.

“Exports were a lot stronger than expected in the third quarter,” said DBS economist Ma Tieying, citing a rebound in demand for smartphones as well as “returned production” to Taiwan from China amid the trade war.

Ma raised her forecast for Taiwan’s 2019 growth to up to 2.3% from 1.9%, adding that growth in the fourth quarter could remain “stable”.

“But it remains a question on how long the technology rebound would last,” she said. “Concerns for global uncertainties as well as trade protectionism remain.”

Bucking a regional trend of GDP pace downgrades, Taiwan in August raised its 2019 full-year forecast to 2.46% and predicted faster growth of 2.58% next year.

The economy grew 2.63% in 2018, according to the statistics agency.

Taiwan’s export orders, a leading indicator of actual exports in coming months, fell for the 11th straight month in September but at a slower pace than in August.

The government expects a rebound in orders for electronics in coming months partly due to rising demand for new technologies including fifth-generation (5G) telecommunication technology and artificial intelligence. (Reporting by Yimou Lee and Jeanny Kao; Editing by Richard Borsuk)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below