Taiwan to see 2.82% GDP growth in '14: DGBAS
By John Liu, The China Post
February 19, 2014, 12:13 am TWN
TAIPEI, Taiwan -- Taiwan will see 2.82-percent GDP growth this year, the Cabinet's Directorate-general of Budget, Accounting and Statistics (DGBAS) said yesterday.
The latest forecast was a 0.23-percent upward adjustment from the previous estimate of 2.59 percent made in November last year. As the economies of developed countries became stable and domestic private consumption went up, the DGBAS forecast higher exports and private consumption down the road. Imports are also expected to grow as a consequence.
The DGBAS also made an adjustment to economic growth in the fourth quarter last year. It grew 2.95 percent, up 0.03 percent from the previous estimate of 2.92 percent made in January. Higher than expected exports, investment and consumption caused the adjustment, the DGBAS said.
In the fourth quarter, while exports of mineral products, optical instruments and information and communication technology (ICT) products continued to decline, exports of electronics products, base metal products and machineries grew, resulting in a combined growth of 1.76 percent in exports, compared with a year ago.
Strong Private Consumption
The stock market averaged 8,345 points in the fourth quarter, which was up 12.1 percent compared with the same period a year ago. Transactional value in the stock market grew 17.02 percent, while total listed value grew NT$3.8 trillion. The increased wealth contributed to higher private consumption, the DGBAS said.
In addition, car manufacturers slashed prices and rolled out new models in the fourth quarter. New sedan license registration grew 21.45 percent in the fourth quarter. It was the second largest growth since the second quarter of 2011.
Retail and food sales grew 4.26 percent and 2.85 percent in the fourth quarter, respectively. In sum, private consumption grew 3.28 percent year-on-year, which was also the highest growth since the fourth quarter of 2011.
Strong Business Investment
Taiwan also saw strong private investment in the fourth quarter. With strong global sales in consumer electronics products, local semiconductor businesses continued to make capital investment. Hardware and equipment imports grew 13.97 percent in the fourth quarter in terms of transactions made with the New Taiwan Dollar.
The manufacturing sector's investment index ended eight consecutive quarters of negative growth to turn 3.11 percent growth in the fourth quarter. With the depreciation of the Japanese yen, machinery equipment prices dropped 9.13 percent, resulting in an actual growth of 31 percent. All in all, fixed asset investment grew 12.17 percent, the highest since the second quarter of 2011.
Global Insight Predicts Growth
With these adjustments, Taiwan's economic growth in 2013 was adjusted to 2.11 percent, down 0.08 percentage point from the 2.19 percent estimated made in January.
According to Global Insight, the world will see an economic growth of 3.3 percent on average in 2014, up from 2.5-percent growth in 2013. The research institute forecast higher economic growth than last year across the globe.
The institute predicts 2.1-percent growth in developed nations and 5.1 percent in developing nations. In addition, the U.S. will see 2.7-percent growth this year, 1.5 percent in the euro zone, 7.8 percent in mainland China and 1.8 percent in Japan.