While consumption slowed due to coronavirus restrictions imposed to control a local COVID-19 epidemic in the July-September period, exports and foreign direct investment continued to grow at their fastest rates since the second quarter of 2020 throughout the time.
Taiwan’s Economy Grows Somewhat More Slowly Than Expected In The Third Quarter As A Result Of The Covid
According to preliminary data from the statistics agency released on Friday, the economy’s gross domestic product (GDP) increased by 3.8 percent in the third quarter from a year earlier, following a 7.43 percent increase in the April-June period. This was slightly lower than the 4 percent growth forecast in a Reuters poll at the time. This was the worst growth the economy had had since the second quarter of 2020 when it gained 0.35 percent.
A statement from the agency said that “better-than-expected domestic investment, as well as the continuing increase of exports, was primarily responsible for (GDP growth).” The effect of pandemic restrictions, which partly countered growth, had a negative influence on consumption, which was low.
The government’s efforts to curb an increase in COVID-19 cases that began in mid-May contributed to a 5.49 percent fall in consumption in the third quarter of this year. However, analysts predict consumption to return as a result of the government’s decision to withdraw the majority of the restrictions after successfully containing the epidemic.
According to Gareth Leather, senior Asia economist at Capital Economics, “With the latest COVID-19 epidemic under control and the vaccine deployment gathering speed, consumption should improve.” Nonetheless, Taiwan’s economy continues to profit from strong worldwide demand for its high-tech products and chips, while domestic investment has also contributed to the country’s robust economic performance.
Exports increased 30.12 percent in dollar terms over the same period the previous year, the agency said, adding that investment in industrial capacity development and renewable energy was on the rise. Still, it did not provide any specifics on the increase in investment.
“Taiwan’s exporters will be kept busy for some time to come due to a backlog of orders. Meanwhile, the spike in demand for semiconductors is fueling a flurry of investment, which will continue to bolster the economy’s overall growth rate “Leather has been added. ANZ said it had raised its GDP growth prediction for 2021 to 6.0 percent, citing robust investment in the third quarter as the reason for the revision.
According to official projections, the economy will increase by 6.0% in 2021, with both the government and the central bank predicting that figure. In the wake of the epidemic, the economy grew by 3.12 percent in 2020. According to Wu Pei-Hsuan, a statistician, as long as foreign demand for Taiwan’s goods remains robust, both the island’s exports and production are likely to maintain their “strong development momentum” in the next year. Sales have been bolstered by pent-up demand in nations that have just emerged from lockdowns, while microprocessor costs have risen as a result of a worldwide scarcity.
A worldwide scarcity of chips for everything from automobiles to consumer electronics has also boosted demand for Taiwanese-made semiconductors, with makers swiftly increasing production to meet the growing market need for these products. One possible concern is a downturn in the economy of China, which is Taiwan’s most important trade partner and largest export market. As a result of rare COVID-19 outbreaks and power shortages, the world’s second-largest economy expanded at its weakest rate in a year in the third quarter of 2018.