November 24, 2017 / 9:56 AM / in a year

UPDATE 1-Taiwan raises 2017 GDP outlook, exports to fuel momentum

* Taiwan raises GDP growth outlook to 2.58 pct from 2.11 pct

* Raises GDP growth forecast to 2.29 pct for 2018

* Says private consumption helping to maintain growth momentum (Updates with comments from government and analyst)

By Jeanny Kao and Brenda Goh

TAIPEI, Nov 24 (Reuters) - Taiwan raised its 2017 economic growth forecast to 2.58 percent from 2.11 percent on Friday, as stronger-than-expected exports and private consumption helped drive economic momentum.

The island economy’s final reading on third quarter GDP joined the list of upside surprises reported across much of Asia as manufacturers there gained from the global tech boom.

“Taiwan’s exports are expected to remain solid in the fourth quarter of 2017, mainly underpinned by robust global demand, particularly for semiconductor and consumer electronic products,” the government said in a statement.

“In the domestic sector, real private consumption is maintaining the growth momentum, benefiting from the accelerated economic growth, improving labour market and the vibrant stock market performance.”

The government also nudged up its outlook for 2018 to 2.29 percent from 2.27 percent projected in August.

In February, Taiwan projected 1.92 percent growth for 2017, and that forecast was lifted to 2.05 percent in May, and then 2.11 percent in August.

Third-quarter growth was tweaked to 3.10 percent from the government’s initial estimate of 3.11 percent.

The latest revision was announced by the Directorate General of Budget, Accounting and Statistics.

Exports have proven a strong spot in the economy this year, and the last few months are traditionally a busy season with manufacturers meeting orders for the launches of new smartphone products and other gadgets. Apple Inc’s highly anticipated iPhone X went on sale on Nov. 3.

Taiwan is one of Asia’s major exporters especially of technology goods, and its export trend is an important gauge of global demand for technology gadgets worldwide.

Achilles Chen, an analyst at Cathay Financial, said the government’s bumped up forecast was in line with expectations.

“A growth rate of more than 2 percent should not be a problem next year especially since there is optimism and confidence among the public.”

However, she added that potential U.S. fiscal reforms and oil prices could pose risks to the growth outlook.

On inflation, the government trimmed its 2017 forecast to 0.62 percent from 0.66 percent, citing stable domestic food prices. But it slightly raised inflation to 0.96 percent from an earlier estimate of 0.87 percent for 2018. (Reporting by Jeanny Kao and Brenda Goh; Writing by Jess Macy Yu; Editing by Jacqueline Wong)

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