Taiwan’s economy to slow in fourth quarter as exports falter: Reuters poll

Containers are seen stacked up at the Port of Kaohsiung in southern Taiwan
FILE PHOTO: Containers are seen stacked up at the Port of Kaohsiung in southern Taiwan, May 12, 2009. REUTERS/Pichi Chuang

January 28, 2019

TAIPEI (Reuters) – Taiwan’s economic growth probably slowed in the fourth quarter as the island’s technology exports were hit by softening global demand and fallout from the U.S.-China trade war.

The median forecast in a Reuters poll of 14 economists was for fourth-quarter gross domestic product to expand 2 percent from a year earlier. Taiwan reported 2.27 percent annual growth for the third quarter.

The preliminary figures will be released on Thursday along with a brief statement. Revised figures will be released about three weeks later, with details and forecasts.

The government in November slightly lowered its economic growth forecasts for 2018 and 2019. It trimmed 2018 to 2.66 percent from a preliminary 2.69 percent and its projection for 2019 to 2.41 percent from 2.55 percent.

Taiwan’s export orders, a leading indicator of actual exports in the coming months, suffered their steepest fall in more than two-and-a-half years in December. Analysts expect the island’s shipments to be affected in the first half, especially from a drag in Apple’s iPhone sales.

At least two of the island’s heavyweight companies, Taiwan Semiconductor Manufacturing Co and manufacturer Foxconn, formally known as Hon Hai Precision Industry Co, count tech giant Apple Inc as a major customer.

In January, Apple Inc took the rare step of cutting its quarterly sales forecast, with Chief Executive Tim Cook blaming slow iPhone sales in China.

TSMC, the world’s largest contract chipmaker, has cut full-year investment and forecast its sharpest quarterly revenue fall in a decade, joining a string of tech companies warning of a slowdown in global smartphone demand.

In December, Taiwan’s central bank said it expects the economy to expand 2.33 percent in 2019, down from a previous forecast of 2.48 percent.

The central bank also held its benchmark discount rate at 1.375 percent, which has remained unchanged since June 2016, adding that it would maintain appropriate loose monetary policy to support the economy.

(Poll compiled by Carol Lee; Writing by Jess Macy Yu; Editing by Jacqueline Wong)

Source link