Economy

Stocksak: Taiwan Q3 GDP sees 3.2% growth, but faces trade headwinds


© Stocksak. FILE PHOTO – People ride a scooter along a street in Taipei on August 10, 2022. REUTERS/Aleksander Solum/File Photo

TAIPEI (Stocksak). Taiwan’s economy grew slightly faster than the previous quarter, but at an anaemic rate due to global economic headwinds that have slowed down demand for technology, which is a key export. A Stocksak poll revealed.

According to a poll of 20 economists, July-September’s gross domestic product (GDP), likely grew 3.2% versus a year ago, after increasing 3.05% in the second quarter.

The policymakers expect growth of less than 4 percent for the full year 2022, downgrading previous forecasts of greater than 4% and slower that the 6.45% reported for 2021. It was the fastest rate since 2010.25% in 2010.

The estimates of economists for Friday’s preliminary GDP data ranged widely, from 1.8% growth to 4.4%.

The COVID-19 lockdowns in China and the soaring global inflation have all had a negative impact on Taiwanese exports.

Woods Chen, Yuanta Securities Investment Consulting’s head of macroeconomics in Taipei, stated that domestic demand was “not terrible” because Taiwan is gradually removing COVID-19 controls. But the problem was with exports.

“Our estimate is quite high, and that’s because there’s negative growth in exports,” said he, pointing out September exports which fell an annual 5.3%, the first contraction for more than two decades.

Taiwan’s economy was a major hub in the global supply chain of technology for giants like Apple Inc (NASDAQ:). It has outperformed many of its regional peers.

The demand books for Taiwanese chipmakers like Taiwan Semiconductor Manufacturing Co Ltd, (TSMC) have increased due to a global shortage of semiconductors.

TSMC reported a 80% rise in third quarter profit, the largest growth in two decades.

The third quarter saw a 3.9% increase in China’s economy, Taiwan’s largest trading partner. This was faster than expected and a significant improvement on the 0.4% pace recorded in the second quarter.

Taiwan’s preliminary figures are expected to be released in a statement, with very little commentary. A few weeks later, revised figures will be released with more details and forward-looking predictions.

(Poll compiled and reported by Jeanny Kao, Carol Lee, and Devayani Sathyan; Reporting by Ben Blanchard

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