Taiwan economy grew 2.58% in Q4 on export boost

Flags with rooster patterns hang over the crowd as local residents shop in a traditional market in Taipei.
Flags with rooster patterns hang over the crowd as local residents shop in a traditional market in Taipei. PHOTO: AFP

TAIPEI (BLOOMBERG) - Taiwan's economy ended last year on its strongest footing in almost two years, supported by activity tied to trade amid weakness in private consumption.

Gross domestic product rose 2.58 per cent last quarter from a year earlier, preliminary data from the statistics bureau showed on Wednesday (Jan 25). That compares with a median estimate of 2.85 per cent growth in a Bloomberg survey and follows 2.03 per cent third-quarter growth.

Strong growth of expenditures tied to exports was outweighed by weakening private consumption and government spending, the data showed.

The island's economy has showed signs of resilience in the past year, recovering from a three quarter long contraction to finish 2016 on a strong note. Improving demand from the US, better domestic consumption and the new iPhone have all boosted its prospects this year and will likely keep central bank policy makers on hold.

"Taiwan's economy rebounded strongly in the final quarter of last year, but with weak global demand set to drag on exports and limited scope for more policy support, the recovery is likely to run out of steam soon," Gareth Leather, a senior Asia economist at Capital Economics in London, wrote in a report. "Weak growth in Taiwan's main trading partners is likely to weigh on export demand."