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May 29, 2017

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Taiwan sees 2.19-percent GDP growth in 2013

TAIPEI, Taiwan -- Taiwan saw 2.19-percent GDP growth in 2013, as exports, investment and consumption exceeded expectation in the fourth quarter, the Directorate-General of Budget, Accounting and Statistics (DGBAS, 主計處) said yesterday.

The growth rate released yesterday was 0.45 percentage points higher than DGBAS's previous estimate of 1.74 percent. The fourth quarter last year saw 2.92-percent GDP growth, also up 1.7-percent from the DGBAS's previous estimate.

Taiwan saw 1.44 percent, 2.69 percent and 1.66 percent GDP growth in the first, second and third quarter, respectively.

Higher Than Expected Figures

While electronics products took the lead in Taiwan's exports, base metals and machineries also outperformed in the fourth quarter, whereas the former grew 4.23 percent and the latter grew 9.05 percent. The two sectors each declined for seven and six consecutive quarters respectively as of the third quarter of 2013. All in all, exports saw a real growth of 3.95 percent in the fourth quarter, up 2.86 percentage point from the previous estimate, DGBAS said.

The average stock index was pegged at 8,346 points in the fourth quarter. Stock index and transaction value respectively grew 12.2 percent and 17.02 percent. The growth in stock market also resulted in higher private consumption, the DGBAS said.

Due to car dealers' heavy promotion, registration of new vehicles grew 21.45 percent in the fourth quarter, which was the highest growth since the second quarter of 2011. The retail sector and food sector grew 4.26 percent and 2.85 percent, respectively. All in all, private consumption grew 3.25 percent in the fourth quarter, up 1.24 percentage point from the previous estimation.

Thanks to higher sales of electronics consumer products around the globe, the domestic semiconductor industry increased its investment by 11.75 percent in the fourth quarter. The manufacturing sector's investment also grew 3.11 percent. All in all, capital formation grew 9.74 percent in the fourth quarter, up 4.77 percentage point from the previous estimate.

Economic Recovery and Risks Co-existing

The economy has shown signs of improvement, said DGBAS senior official Jasmine Mei (梅家瑗). The IMF recently adjusted its economic growth rate forecast from 2.9 percent in 2013 to 3 percent in 2014, while the Global Insight adjusted its forecast from 2.4 percent to 2.5 percent, and the World Bank Group changed from 2.2 percent to 2.4 percent. They marketed the first upward adjustment after multiple downward adjustments made by these institutions, Mei said.

Mei noted, however, that the current economy can be described as "recovery and risks co-existing." While the fundamentals of the U.S. economy are turning positive, the looming quantitative easing remains a risk factor. While the economy is improving in the eurozone, low inflation may lead to higher real interest rates and deflation. Japan is set to increase their consumption tax in April, which may hurt private consumption. China's plans to restructure its economy may lead to lower economic growth rate this year.

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