Taiwan economy set to grow 3.91 percent

Taiwan exports are projected to grow 4.31 percent in 2012, spurred by growing demand for high-tech products in markets around the world.

Taiwan’s economic growth for 2012 is projected at 3.91 percent, while gross domestic product per capita will reach US$20,527, according to the latest forecast by the Directorate-General of Budget, Accounting and Statistics Jan. 31.

Although the local economy will continue to feel the heat of tightening global conditions, booming demand for high-tech gadgets such as smartphones and the need for mainland Chinese firms to upgrade their operations will help exports grow 4.31 percent this year, the DGBAS officials said.

“Private consumption is set to rise 2.69 percent, and capital formation is beginning to move in the right direction, increasing just over seven percentage points from last year as more firms start investing in Taiwan,” they added.

Consumer price increases are also expected to remain mild on the back of central government price-stabilizing measures and sluggish rent growth, according to the DGBAS.

Advance estimates produced by the DGBAS reveal the local economy expanded 1.9 percent in the fourth quarter of 2011, bringing annual growth to 4.03 percent, 0.48 of a percentage point lower than expected. Per capita GDP amounted to US$20,154, while the CPI went up 1.42 percent.

In related news, Taiwan’s overall economic monitoring indicator remained blue for December 2011, reflecting the ongoing effects of the European debt crisis, according to the Council for Economic Planning and Development.

The indicator’s composite score, which was adjusted from 17 to 16 for November on weaker-than-expected industrial production, dropped another two points to 14.

Seven of the index’s nine components continue to show signs of strain, with nonagricultural employment, and machinery and electrical imports the only two exceptions.

Despite this gloomy result, the leading indicator stood at 128.3, up 0.5 percent from November, continuing a four-month upward trend.

“This encouraging development gives rise to expectations that the economy will post a quarterly improvement on the strength of private consumption,” a CEPD official said.