2019.05.2409:10:00UTC+00Taiwan Cuts 2019 Growth Forecast On Weaker Tech Export Outlook

Taiwan's government slashed the growth forecast for this year on Friday, citing a weaker outlook for exports due to the global trade tensions.

The government cut the growth forecast for this year to 2.19 percent from 2.27 percent predicted earlier, the Directorate-General of Budget, Accounting and Statistics, or DGBAS, said.

The momentum in the world economy anticipated to be slower this year, together with the inventory adjustments in the semiconductor industry and worldwide weaker demand for mobile devices, would drag the export growth, the agency said.

Total exports are forecast to grow 2.62 percent this year versus 3.75 percent last year. Private consumption is expected to rise 2.02 percent, supported by a stronger labor market, income tax cuts and subsidies.

Investments are projected to grow 4.48 percent, mainly driven by the outlay in the semiconductor manufacturing.

The inflation forecast was also revised downward, by 0.02 percentage points to 0.71 percent. That was mainly due to the decrease in the wholesale prices and the end of the impact from lifting tobacco tax.

The agency also released the growth figures for the first quarter.

Gross domestic product grew 1.71 percent year-on-year, which was slightly less than the 1.72 percent flash estimate released on April 30.

Fourth quarter growth for 2018 was revised 1.80 percent from 1.78 percent.

GDP rose 2.33 percent quarterly on a seasonally-adjusted annualized basis in the first quarter.

The full year growth for 2018 was confirmed at 2.63 percent.

In the first quarter, private consumption annual growth slowed to 1.32 percent from 1.46 percent, due to weaker sales of vehicles, information and communication technology equipment and financial services.

Investment growth eased to 6.90 percent from 9.32 percent. Exports grew 0.97 percent and imports rose 1.13 percent.