TAIPEI (REUTERS) - Taiwan's economy grew at its fastest pace in more than a year in the third quarter, thanks to strong demand for tech gadgets ahead of the year-end shopping spree and better investment and consumption at home.
The result marked the latest evidence of a gradual recovery in the export-driven economy, and backs expectations that the central bank would hold rates steady for a second time at its December quarterly meeting.
Taiwan's gross domestic product growth accelerated to 2.06 per cent in the third quarter year-on-year, almost three times the 0.7 per cent growth clocked in the second quarter, preliminary government data from the Directorate General of Budget, Accounting and Statistics showed on Friday (Oct 28).
"Though global economic growth remains slow... (Taiwan's) exports gained momentum from stronger semiconductor demand and launches of handheld devices," it said in a statement. "Consumption and investments at home were better than forecast."
A Reuters poll had forecast the economy to have expanded 1.8 per cent in the third quarter on-year.
On a seasonally adjusted annualised rate (SAAR) basis, the economy grew 4.54 per cent in the July-September period, well ahead of the 0.23 per cent in the second quarter.
Taiwan is a major Asian production house for global tech names such as Apple Inc, making components for smartphones, notebook PCs and other gadgets.
The global slowdown of the past two years or so, led by a cooling in major trading partner China, had depressed growth in the island.
However, signs of a recovery have started to emerge. Taiwan's export orders - a leading indicator for Asia's exports and a pointer to shipment activity two to three months ahead - rose sharply more than expected in September as vendors rushed to stock up on supplies for Apple's iPhone 7 and other tech gadgets to meet year-end demand..
That surprise came on the heels of an unexpected 8.3 per cent jump in August - its first gain in 17 months.
The government in August raised its 2016 full-year economic growth outlook, after earlier slashing forecasts for the year three times, hoping demand from China and its other major markets would pick up.
Taiwan's central bank left its key policy rate unchanged in September, saying it has done all it can to support the economy and called for more structural reforms to keep growth on track. It had cut rates over four straight meetings previously.