In a recent poll conducted by Reuters, economic experts have forecasted a notable uptick in Taiwan's economic growth for the third quarter of the year. This optimistic outlook is primarily attributed to resilient domestic consumption and a tentative rebound in exports, marking a positive shift for Taiwan's trade-dependent economy.
According to the survey of 20 economists, Taiwan's Gross Domestic Product (GDP) is projected to have expanded by 2.1% in the July-September period compared to the same timeframe in the previous year. This follows a growth rate of 1.36% year-on-year in the second quarter, which had experienced a recession in the first quarter.
The economists' predictions for preliminary GDP data, scheduled for release on Tuesday, exhibit a wide range, spanning from a modest 0.5% expansion to a robust 3.75%. This variance highlights the complexity of economic factors at play.
One notable contributor to this positive economic outlook is Taiwan's export sector, which displayed signs of recovery in September. Exports recorded a year-on-year drop of 5.1% for the third quarter, a significant improvement compared to the second quarter's annual contraction of 16.9%. Increased demand from the United States, particularly in anticipation of the year-end holiday shopping season, played a crucial role in this turnaround.
Kevin Wang, an economist at Taishin Securities Investment Advisory in Taipei, noted that while external demand for Taiwanese goods was on the rise, it was not yet characterized by robust momentum. Instead, the standout performer in the third quarter was private consumption, driven in part by the peak summer vacation season.
Taiwan's government statistics bureau previously projected full-year growth for 2023 at 1.61%, marking its slowest pace in eight years and a decline from the 2.45% growth recorded in 2022.
Meanwhile, the economy in China, Taiwan's largest export market, exceeded expectations by posting a 4.9% year-on-year growth rate in the third quarter.
Taiwan occupies a pivotal role in the global technology supply chain, serving as a crucial hub for industry giants like Apple Inc. Additionally, it is home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).
Taiwan's preliminary GDP figures will be released in a statement with minimal commentary, with revised figures to follow in the coming weeks, providing more comprehensive insights and forward-looking forecasts.