Taiwan Q1 preliminary GDP grows faster than expected

div classBodysc17zpet90 cdBBJodivpBy Jeanny Kao and Yimou Leep

pTAIPEI Reuters Taiwans economy grew at a slower pace in the first quarter compared with the previous three months but still performed better than expected, supported by strong tech exports and global chip demand, but growth could cool as the year progresses.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pFor the JanuaryMarch period, annual gross domestic product GDP growth was put at 3.06, compared with 4.86 for the previous quarter, preliminary data from the statistics agency showed on Thursday.p

pThat was above an increase of 2.9 forecast in a Reuters poll, but was the slowest growth since the second quarter of 2020, when the economy grew 0.63 yearonyear. p

pAs a key hub in the global technology supply chain for giants such as Apple Inc, Taiwans economy has outperformed many regional peers during the COVID19 pandemic, benefiting from robust demand for tech exports as more people have turned to working and studying from home.p

pA global shortage of semiconductors has also filled Taiwan chip makers order books and driven them to expand production at home.p

pTaiwans exports rose 29.4 in 2021, and the economy continues to benefit from strong global demand for its hightech goods and chips.p

pTotal firstquarter exports soared 23.5 from a year earlier in U.S. dollar terms, the agency said.p

pIt attributed the quarterly GDP growth to strongerthanexpected exports, driven by continued international demand for the islands tech products including semiconductors.p

pA recovery in domestic consumption amid the relaxation of COVID19 rules was offset by inflation, and consumption only grew marginally in the quarter, it added. p

pKevin Wang, an economist at Taishin Securities Investment Advisory Co, said second quarter domestic demand may remain weak due to a recent spike in COVID19 cases, but he was sticking to a 4.2 growth forecast for the quarter.p

p“As for exports, we need to watch whether U.S. consumer strength has been reduced due to worsening inflation, and whether the impact of Chinas lockdown measures in response to the epidemic on the supply chain and production has expanded,” he said.p

pStatistics official Wu Peihsuan said the impact of the Shanghai lockdown would become apparent for Taiwan in the second quarter.p

pCapital Economics said it expected growth to slow from hereon, with a hit to consumption from Taiwans COVID19 cases and a softening of exports “as higher inflation and rising interest rates weigh on demand in key export markets.”p

pChinas economy grew by a fasterthanexpected 4.8 yearonyear in the first quarter, but slowed sharply in March as sweeping COVID19 curbs, especially in Shanghai, and the Ukraine war disrupt production and weaken demand.p

pTaiwan will release revised GDP figures on May 27, including fullyear growth forecasts for 2022.p

p Reporting by Jeanny Kao and Yimou Lee Additional reporting by Roger Tung Writing by Ben Blanchard Editing by Kim Coghillp

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