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By Faith Hung and Jeanny Kao
TAIPEI, April 30 Taiwan's export-dependent
economy grew at its quickest pace in over a year in the first
quarter, data showed on Wednesday, suggesting rising momentum in
developed economies and an improving outlook for the global tech
The preliminary growth rate of 3.04 percent in the
three-months to March 31 also indicated that the island's
economy may be able to weather a slowdown in China, its biggest
market, as exports to the United States and Europe showed a
heartening pick up.
Taiwan's economy, home to the world's biggest contract
chipmaker and a crucial supply chain for major electronics
brands, is often viewed as a bellwether for global growth and
"What's eye catching was the strong contribution of net
exports, which added 1.57 percentage points to the overall
growth rate," said analyst of Raymond Yang with ANZ in Hong
The first quarter growth was the strongest since the last
quarter of 2012, according to the Directorate General of Budget,
Accounting and statistics, driven by a low-base of comparison,
solid private consumption and a steady pick up in exports.
It was largely in line with a median forecast of 3.0 percent
in a Reuters poll and slightly ahead of the 2.95 percent rate
booked in the fourth quarter of 2013.
The signs for the rest of the year were positive, and backed
the International Monetary Fund's view that an increase in
output in richer nations will spur the global
March exports to the United States, Taiwan's no. 2 market,
rose 10.3 percent on-year, with shipments to Europe up 10
percent -- in both cases it was the strongest growth rate in a
The increase up in shipments provide a shot in the arm to
Taiwan's economy, which is facing some uncertainty as growth in
China continues to slow down this year..
On a sequential basis, GDP growth eased substantially to 1.1
percent on-quarter, from over 7 percent in the fourth quarter --
due to weakness in domestic demand -- which points to the need
for the export sector to pick up the slack.
The recent eye-catching results from Apple Inc,
which sources many components from Taiwan and contracts out much
of its production of iPhones and iPads to firms such as Hon Hai
Precision Industry Co Ltd, also bodes well for the
"I still view the export picture as good overall. Despite
the relative weakness in some sectors like flat panels, if you
look at products such as semiconductors and chips, we're still
doing quite well," said Rick Lo, senior economist of Fubon
Lo said that Apple's iPhone 6, expected to be launched
around September, "should continue to drive Taiwan's exports in
a positive direction."
Apple's luster had already rubbed off on some of Taiwan's
big tech firms.
Hon Hai's first-quarter profit came in above expectations,
on continued strong sales of Apple-branded iPhones and iPad
Taiwan Semiconductor Manufacturing Co Ltd, the
world's largest contract chip maker and another supplier of
Apple, reported bright first-quarter numbers and an optimistic
outlook for 2014 on increased demand for its chips in high-end
Domestic private consumption grew 2.94% on year, just ahead
of the government's pick for a 2.84% rise, mainly supported by
increasing confidence on the back of a rising stock market and
an increase of tourists from China.
The improving economy has also lured foreign-investor
inflows in recent months, sending the Taiwan stock market
surging to its highest point in almost three years.
Wednesday's GDP data puts the economy on track to meet the
statistics agency's 2014 growth estimate of 2.82 percent. The
government's revised first-quarter number will be finalised in
the next few weeks.
The government did not amend its outlook for economic growth
this year. In March the head of the statistics agency said
growth could potentially reach 3 percent in 2014, which would be
the best growth rate in three years.
"Despite a pullback in both exports and imports, I was
pleasantly surprised by the strength in private consumption.
This points to the overall strength in the labor market and a
steady if gradual improvement in wages," said Fubon's Lo.
(Additional reporting by Michael Gold; Editing by Shri