Taiwan upgraded its growth outlook for this year as higher overseas demand for technological applications helped the economy to withstand the downturn posed by the coronavirus pandemic.
The economy is forecast to grow 2.54 percent this year, up from the previous projection of 1.56 percent. But the government lowered its outlook for next year to 3.83 percent from 3.92 percent.
Gross domestic product grew 3.92 percent year-on-year in the third quarter, faster than the 0.35 percent growth in the second quarter, data from the Directorate-General of Budget, Accounting and Statistics showed. The real GDP surged 16.59 percent on a quarter-on-quarter, seasonally-adjusted annualized basis in the third quarter, in contrast to a 2.8 percent fall a quarter ago.
Taiwan's manufacturing activities were less affected by Covid-19 pandemic, the DGBAS said. The capacity expansion in dominant semiconductor manufacturing and demand for new technological applications underpinned exports growth this year.
However, offset by weakened global demand, slumping raw material prices and reducing tourists, real exports of goods and services will grow by 1.08 percent, the agency said.
Meanwhile, the real private consumption is expected to contract 2.52 percent, mainly owing to the impact of Covid-19 on the residents' travel expenditure abroad due to the border controls.
In the meantime, real private fixed capital formation is forecast to grow 1.47 percent, supported by the continuing investment of semiconductor industry and 5G network construction. Consumer prices are forecast to fall 0.26 percent this year, revised downward by 0.07 percentage point, mainly reflecting the converging decline in oil and raw material prices.