Taiwan Q2 GDP returns to on-year growth, beats forecasts

[TAIPEI] Taiwan's trade-reliant economy returned to on-year growth in the second quarter after three straight quarters of decline, as the contraction in exports slowed and investment increased.

The growth, however, is unlikely to change the government's meagre full-year GDP estimate of 1.06 per cent with weak global demand maintaining pressure on the island's central bank to trim interest rates again.

The economy grew 0.69 per cent year on year in the second quarter, data showed on Friday, better than the 0.56 per cent growth forecast in a Reuters poll. "Although global economic growth is slow...the semiconductor industry is gaining momentum," the Directorate General of Budget, Accounting and Statistics said in a statement.

The expected launch of Apple Inc's new iPhone model later this year and typically stronger demand ahead of the Christmas shopping season are unlikely to provide much support for Taiwan's exports in the second half of this year, some analysts said.

Taiwan is a major Asian production house for global tech names such as Apple, making components for smartphones, notebook PCs and other gadgets.

REUTERS