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Taiwan's economy posts 3.84% growth in Q2

TAIPEI, Taiwan -- The Cabinet's Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday adjusted Taiwan's second quarter GDP growth to 3.84 percent, up 1.05 percentage points from its previous estimate.

The latest figure marked the third consecutive quarter of growth and also the highest level of growth in the past six quarters. The economy is undergoing a “stable recovery,” according to DGBAS senior official Jasmine Mei (梅家瑗).

The adjustment in growth was made on the back of better-than-expected exports of products and services, according to the DGBAS.

Exports of electronic products, machinery and base metal products grew in the second quarter. Exports of mineral products, optical instruments, information and communication technology (ICT) products declined, however, due to intense competition with other international players.

Tourist numbers to Taiwan, a figure indicating a type of service export, grew by more than 30 percent between April and May, which was a new high in about 10 years. The number of South Korean tourists surged by 68 percent, followed by 38-percent growth from Chinese tourists and 21-percent growth from Japanese tourists. Nevertheless, Chinese travelers account for 40 percent of all travelers to Taiwan.

Growth Fueled by

Strong Private Consumption

Domestic consumption was another main driver that boosted second quarter growth. With improvement in the job market as well as an increase in average earnings (3.56 percent), private consumption has gone up, said the DGBAS.

Taiwan's stock market index averaged 9,019 points in the second quarter, which was about 12 percent higher, year-on-year. Accumulated wealth gained through the booming stock market also contributed to added purchasing power. Retail and food services sales grew 4.64 percent and 4.58 percent respectively.

As sales of vehicles continued to grow, new license plate registration numbers grew by 20 percent in the second quarter. The number of Taiwanese nationals traveling overseas between April and May grew by 16 percent.

DGBAS Slated to Update

Growth Rate for 2014

A number of think tanks, both domestic and abroad, have recently raised their growth forecast on Taiwan's economy in 2014. Academia Sinica (中研院) projected 3.31-percent growth. Chung-Hua Institution for Economic Research (中經院) forecast 3.15-percent growth. Yuanta-Polaris Research Institute (元大寶華) raised its forecast to 3.18 percent.

The figures are all close to the 3.2-percent goal set by the Cabinet's National Development Council. The DGBAS's latest forecast is pegged at 2.98 percent. It is the only institute whose prediction is less than 3 percent. However, it is scheduled to release an updated growth prediction on Aug. 15.

Some analysts believe that the DGBAS's updated second quarter growth figure was a de facto announcement that Taiwan's economic growth will exceed 3 percent this year.

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