Taiwan growth figures surprise on downside

TAIPEI – ANZ Bank says it consider today’s release by Taiwan of growth figures a big downside surprise. Growth slowed to 1.58% y/y in Q3, much lower than the 10-year average of 4.1%, indicating that the output gap remains negative. Sequentially, growth stalled at just 0.09% q/q sa, or 0.35% q/q saar, suggesting that the economic recovery may be losing steam.

ANZ says the drag in the headline y/y gain was the sharp decline in net exports contribution to GDP growth from Q2’s 2.08% to Q3’s 0.65%. Investment growth also failed to impress at just 1.04% y/y, contributing 0.17ppt to the headline figure, indicating sluggish business confidence.

“With today’s release, we revise our full year GDP forecast for Taiwan downward to 2.18% from the previous 2.36%. We also fine-tune the 2014 growth forecast downward to 3.6% in 2014, from 3.9% previously, given the fact that global growth profile will likely edge down next year,” ANZ said. “The Government’s GDP forecast for 2013 and 2014 was recently revised downward to 2.31% and 3.37% respectively.”  www.live.anz.com (ATI).