Taiwan: Economic growth remains robust in Q3
November 18, 2011
In the third quarter, gross domestic product rose 9.8% over the same period last year. The reading was well below the 12.9% expansion recorded in the second quarter (previously reported: +12.5% year-on-year) but exceeded market expectations, which had anticipated the economy would expand 8.3%. The robust third quarter expansion mainly reflected solid growth in investment and exports. Private consumption accelerated slightly from a 4.3% annual increase in the second quarter to a 4.5% expansion. Gross fixed capital formation expanded a buoyant 23.7% in the third quarter (Q2: +32.0% yoy). On the external side of the economy, exports of goods and services grew 20.1% (Q2: +32.9% yoy), while imports expanded 22.8% (Q2: +34.0% yoy). As a result, the net contribution from the external sector to overall growth diminished from a 3.9 percentage-point contribution in the second quarter to a 1.4 percentage-point contribution in the third. A quarter-on-quarter comparison does not corroborate the strong growth suggested by the annual figures, as the economy remained flat over the previous quarter in seasonally adjusted terms (Q2: +0.5% quarter-on-quarter). Owing to the modest performance of the global economy, the government expects economic growth to moderate from 9.9% this year to 4.5% in 2011.