Taiwan posts robust Q4 growth on improved exports and surging domestic consumption
Taiwan's economy expanded at a faster-than-estimated pace in the fourth quarter of last year as recoveries in Europe and the United States boosted the island's exports.
Its gross domestic product rose 2.92 per cent year on year after growing 1.66 per cent in the third quarter, the statistics bureau said in a preliminary report released yesterday. The median estimate of 18 economists in a survey was 1.83 per cent.
The World Bank raised its global growth forecasts this month as the easing of austerity policies in advanced economies supports their recovery. Taiwan's exports, which account for about 70 per cent of the island's economy, climbed 1.4 per cent last year, data showed last week, after shrinking 2.3 per cent in 2012.
"Local producers, particularly those in the technology sector, will benefit from rising external demand," said Tony Phoo, an economist at Standard Chartered. "We are increasingly optimistic on Taiwan's growth outlook in 2014, and the recovery is likely to boost producers' confidence, [capital expenditure] and employment."
The island's central bank held the benchmark interest rate at 1.875 per cent for a 10th consecutive meeting last month. The monetary authority has said it would maintain order if excessive volatility endangered financial stability, after the US Federal Reserve said it would cut its bond purchases by US$10 billion from this month.
Taiwanese President Ma Ying-jeou has sought closer trade and investment ties with the mainland, while diversifying its economic allies through trade agreements with Singapore and New Zealand.
The island's economy expanded 2.19 per cent last year.