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* Q2 GDP revised to +3.74 pct vs initial estimate +3.84 pct
* 2014 GDP raised to +3.41 pct from preliminary +2.98 pct
* Govt says new iPhone release supports local economy
By Jeanny Kao and Michael Gold
TAIPEI, Aug 15 Taiwan's economy will grow faster
than expected this year as the launch of new gadgets such as
Apple's iPhone 6 helps to offset any drag from the uncertain
recovery of its key trade partners.
The bright prospects for the export-driven economy come as
China and the United States, Taiwan's two biggest trading
partners, are showing sub par economic data highlighting the
fragile global recovery.
"Taiwan's economy in the second half of this year will not
necessarily be affected by global factors due to the release of
iPhone 6," said Tsai Hung-kun, a director of the Directorate
General of the Budget, Accoutning and Statistics (DGBAS).
Taiwan is a key supplier to Apple Inc with contract
manufacturers on the island making everything from
semiconductors to camera modules to casings and then assembling
the gadgets for the new smartphone.
Taiwan's statistics agency on Friday said gross domestic
product will grow 3.41 percent in 2014, which would be the
fastest since 2011. It was also an upward revision from its
previous estimate for a 2.98 percent expansion.
The agency also said that Taiwan grew 3.74 percent in the
second quarter, slightly lower than its initial reading of 3.84
Growth in the third quarter is expected to slow slightly to
3.62 percent and a further 3.08 percent in the fourth quarter
from a year earlier, the agency said.
The government cited tech gadget releases, solid handheld
device demand and stable consumption at home as main drivers of
growth in the second half of the year.
DGBAS minister Shih Su-mei said: "The Taiwan domestic
economy is recovering and on a stable track."
"Semiconductor exports are benefiting from continued
external demand in mobile devices," she said, adding that
"semiconductor firms continue strong capital investment growth."
PRESSURE ON RATES
The economy of China, Taiwan's biggest trading partner,
showed further signs of softening in July despite a burst of
government stimulus measures, suggesting more policy support may
be needed to keep growth on track as a property downturn worsens
Taiwan's strong growth estimate for 2014 has raised the
possibility the central bank will hike interest rates before the
Analysts expect Taiwan's central bank to keep rates steady
at its next quarterly meeting in September as inflation stays
manageable, but rates could be raised by the fourth quarter of
this year or the first quarter of next.
Taiwan forecast its inflation rate, as measured by the
consumer price index, to rise 1.64 percent this year, slightly
higher than an earlier estimate for a 1.53 percent increase. In
2015, inflation should be 1.46 percent, the agency said.
"The pressure from inflation is not really that great right
now," said Sonny Hsu, a vice president with Moody's Investor
(Additional reporting by Faith Hung and J.R. Wu; Editing by