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Taiwan seen still growing in Q2 despite global tech slowdown

[TAIPEI] Taiwan's economy likely grew at roughly the same pace in the second quarter as the first despite slowing global demand for technology products that has hit the island's manufacturers at a time of persisting concern over the US-China trade war.

The median forecast in a Reuters poll of 14 economists was for 1.8 per cent expansion in gross domestic product in April-June compared with a year earlier. Trade-reliant Taiwan reported 1.71 per cent annual growth in the first quarter.

Preliminary second quarter figures will be released on Wednesday. Revised figures will be released about three weeks later, with details and forecasts.

In May, the government lowered its 2019 growth forecast to 2.19 per cent from 2.27 per cent, as sluggish global tech demand dragged on the island's economy.

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Taiwan's export orders, a leading indicator of actual exports in coming months, contracted for an eighth straight month in June, as global companies were hesitant to make new investments in machinery as the Sino-US trade war wears on.

Slowing technology demand, the trade war and US restrictions on Chinese tech giants are taking a growing toll on Asia and its marquee manufacturers.

Chipmaker TSMC in July reported a 7.6 per cent drop in profit for April-June due to sluggish demand, but it gave an upbeat forecast for the coming months thanks to expected robust demand for 5G chips.

REUTERS