TAIPEI (Reuters) – Taiwan’s export-dependent economy likely returned to growth in the second quarter thanks to resilient domestic consumption although exports remained weak, a Reuters poll showed on Wednesday.
Gross domestic product (GDP) likely expanded 0.8% in the April-June period versus a year earlier, the poll of 22 economists showed. GDP had contracted 2.87% year-on-year in the first quarter, with the economy slipping into recession.
The economists’ forecasts for preliminary GDP data due on Friday varied widely from a contraction of 0.2% to growth of 2.0%.
Taiwan’s exports fell more than expected in June, slumping the most in almost 14 years, with the government predicting a return to growth may not occur until November.
Second quarter exports dropped 16.9% compared with the same period last year, an improvement on the first quarter’s annual contraction of 19.2%.
“Domestic consumption has not been bad,” said analyst Woods Chen of Yuanta Investment Consulting.
“The decline in exports could lessen each month in the third quarter. We expect the central bank will not raise interest rates in September,” he added.
The government said in May it expects full-year 2023 growth of 2.04%, its slowest pace in nearly eight years and lower than the 2.45% growth for 2022.
Bank DBS last week last week downgraded its full year GDP growth outlook for Taiwan to just 0.5% from a previous 1.6% citing poor export prospects, though upgraded its forecast for 2025 to 3.5% from 2.8%.
The economy in China, Taiwan’s largest export market, grew 6.3% in the second quarter, coming in under analyst forecasts, as demand weakened at home and abroad, with the post-COVID momentum faltering rapidly.
Taiwan is a key hub in the global technology supply chain for giants such as Apple Inc, and home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).
Taiwan’s preliminary figures will be released in a statement with minimal commentary. Revised figures will be released a few weeks later, with more details and forward-looking forecasts.
(Poll compiled by Veronica Khongwir and Carol Lee; Reporting by Faith Hung and Ben Blanchard; Editing by Stephen Coates)
