According to the results of the third quarter, Taiwan’s economy showed the most intensive growth rates since the beginning of this year.
Experts say that the positive dynamic observed in the economic system of this country is due to the influence of such a factor as an increase in consumer spending, which shows signs of a stable and steady trend. Currently, the mentioned expenses are being restored. Experts note that this process is of particular importance, including in the political context since it has become a kind of impulse for the government of Taiwan before the elections of the president of the country, which are scheduled for January next year.
According to the results of the third quarter, the gross domestic product of the mentioned state showed an annual growth of 2.32%. This is evidenced by official data that were released on Tuesday, October 31. The result for the third quarter exceeded the expectations of economists, who had forecast growth of 2%. In the second quarter, when Taiwan’s economy began to emerge from recession, the GDP indicator increased by 1.36%.
The local Bureau of Statistics reports that consumer spending in the period from July to September increased by 8.9% year-on-year. This figure exceeded the initial expectations of the Government of Taiwan. Also, according to the Bureau of Statistics, external demand for the first time since the third quarter of last year has become a favorable factor influencing the dynamics of GDP.
Bum Ki Son, an economist at Barclays, says that the pace of economic movement in Taiwan was higher than predicted due to two factors, including an increase in exports and a relatively stable positive growth trend in the private consumption sector. Separately, he noted that sales in sphere catering accelerated in September. The expert drew attention to the fact that this trend was recorded against the background of falling leading indicators of the service sector.
Special attention should be paid to the fact that favorable economic dynamics in the current political context of Taiwan turned out to be what can be called the most pertinent process within the existing realities. The election campaign, which is a race for the presidency, is gradually gaining momentum. The vice-president of the island, Lai Ching-te, who is a representative of the ruling Democratic Progressive Party, found that according to the results of polls, his leading position is weakening, which entails a reduction in the rating gap from Ko Wen-je of Taiwan People’s Party and candidate from the Kuomintang Hou Yu-ih. According to some experts, the outcome of the election race will be determined by the direction of ties with China and the United States for at least the next four years.
Wang Tsui-hua, senior executive director of the Taiwan Bureau of Statistics, said during a briefing on Tuesday, October 31, that the economy is likely to grow by 1.6% in 2023. The current economic dynamic is the slowest since 2015. This circumstance can be used by the opposition political forces, which are opponents of the ruling party, as part of the race for the presidency, as an excuse to accuse the government of ineffective policies and making wrong decisions. With a high degree of probability, the slowest economic growth over the past eight years will become a constituent element of the semantic concept of election rhetoric.
The least intensive dynamics of Taiwan’s economy since 2015 is largely due to capital accumulation, which has decreased by more than 14%. This trend is the result of a reduction in the volume of expenditures of the island’s largest technology companies on new plants. Taiwan Semiconductor Manufacturing Co., the largest local exporter, has forecast financial indicators of sales in the range of $18.8 billion to $19.6 billion this quarter, exceeding analysts’ expectations. But at the same time, this company reported concerns about the uncertainty of demand dynamics abroad. Also, Taiwan’s largest exporter revised its full-year capital expenditure forecast to $32 billion, which is the lower end of the previous range.
Wang Cui-Hua says that the situation of uncertainty forces companies to slow down the pace of investment in new equipment. At the same time, investment momentum is stable.
As we have reported earlier, Eurozone Inflation Sinks to Two-Year Low.