Taiwan raises 2020 GDP forecast on better-than-expected exports

[TAIPEI] Taiwan raised its forecast for growth this year as stronger-than-expected international demand for technology products shielded the economy from the global slowdown fuelled by Covid-19.

Gross domestic product (GDP) will likely expand 2.54 per cent in 2020, the statistics bureau said Friday, an increase of almost a percentage point over its most recent forecast of 1.56 per cent made in August.

Third-quarter GDP was revised higher to 3.92 per cent, the fastest pace since the fourth quarter of 2016.

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Initial signs are that the surge in exports is continuing in the fourth quarter. Taiwan's overseas shipments grew 11.2 per cent from a year earlier to a record monthly high of US$32.2 billion in October.

The delayed launch of Apple's iPhone 12 helped boost last month's exports, according to officials. The Ministry of Finance's chief statistician forecast earlier this month that November exports will likely gain between 5 per cent and 8 per cent on year.

The National Development Council's Monitoring Indicator, an index of forward-looking economic signals, rose to 28 in October, its highest level since May 2018.

Taiwan has seen industries initially affected by the coronavirus outbreak, such as traditional manufacturing and hospitality, rebound in recent months. Domestic demand has been bolstered by vouchers issued by the government in an effort to stimulate domestic consumption.

The statistics bureau revised down its forecasts for 2021 GDP growth to 3.82 per cent from 3.92 per cent and 2021 exports to 4.59 per cent from 6.60 per cent.

Much of Taiwan's strong exports are being driven by stellar growth at Taiwan Semiconductor Manufacturing, the island's biggest company. The contract chipmaker's revenue has risen more than 27 per cent this year as of the end of October, helped by Huawei Technologies' hoarding of semiconductors before US restrictions against sales to the company came into effect in September.

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