TAIWAN’S export-dependent economy grew faster than expected in the third quarter, helped by domestic consumption, though exports remained weak as flagging global demand hits sales of the island’s hi-tech products.

Taiwan is a key hub in the global technology supply chain for companies such as Apple, and home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC) .

Gross domestic product (GDP) expanded by a preliminary 2.32 per cent in the July-September period versus a year earlier, the statistics agency said on Tuesday (Oct 31), beating the 2.1 per cent growth forecast by analysts in a Reuters poll.

Quarter on quarter, the economy expanded at a seasonally adjusted annualised rate of 10.47 per cent.

Second-quarter GDP rose 1.36 per cent year-on-year, returning to growth after two quarters in a row of contraction.

“We can call that an economic recovery,” said statistics official Wang Tsui-hua, adding that both consumption and exports were on the rise.

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The growth was mainly driven by consumption, the statistics agency said, with sectors from retail, food and beverages to automobiles recording strong sales.

Taiwan’s exports emerged from a year-long decline in September, rising for the first time in 13 months on increased demand from the US ahead of the year-end holiday shopping season.

Third-quarter exports dropped 5.1 per cent compared with the same period in 2022, but it was still a marked improvement on the second quarter’s annual contraction of 16.9 per cent.

The statistics agency said in August it expects full-year 2023 growth of 1.61 per cent, the slowest pace in eight years and lower than 2.45 per cent growth in 2022.

“We expect a continued recovery for exports while consumption would remain stable and healthy. These would keep GDP growth momentum until the second quarter of next year,” said SinoPac Securities economist Mickey Liao.

The economy in China, Taiwan’s largest export market, grew at a faster-than-expected clip in the third quarter, expanding 4.9 per cent from the year earlier, but its recovery has been patchy.

The statistics agency will provide revised figures for the third quarter on Nov 28, with more details and forward-looking forecasts. REUTERS