Taiwan’s economy grew at a slower pace than previously estimated in the third quarter even as a recovery in China boosted the island’s industrial output and exports, reducing pressure to ease monetary policy.
Gross domestic product increased 0.98 percent in the three months through September from a year earlier, the statistics bureau said today in Taipei, lower than the government’s initial estimate of a 1.02 percent gain. The median in a Bloomberg News survey of 13 economists was 1 percent.
Data signaling China is rebounding has brightened the outlook for Asian exports and lifted currencies including the Taiwanese dollar. Retail sales, factory production and exports on the mainland improved last month, boosting the island’s industrial output growth in October from a year earlier.
“It’s just a slight revision,” said Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd. “The October industrial production figures are very encouraging and suggest Taiwan’s growth momentum will pick up in the fourth quarter. It basically means the central bank will not cut the rate in the December meeting.”
The Taiwan dollar closed little changed at NT$29.171 against its U.S. counterpart in Taipei today. It has gained 2.8 percent in the past three months, the best performer after the South Korean won among 11 most-traded Asian currencies tracked by Bloomberg. The benchmark Taiex Index climbed 3.1 percent after Finance Minister Chang Sheng-ford said government-controlled funds should buy equities.
A Chinese manufacturing index yesterday signaled the first expansion in 13 months, adding to signs that the country is rebounding after a seven-quarter slowdown.
Taiwan today raised its 2012 growth estimate to 1.13 percent from 1.05 percent, and said the economy may expand 3.15 percent next year from 3.09 percent forecast earlier. GDP will rise 2.97 percent in the fourth quarter, it said. Exports will contract 2.16 percent this year, compared to a previous estimate of a 2.5 percent decline, the agency said.
Asian officials have restrained their stimulus efforts as global expansion slowed, with some refraining from interest-rate cuts to preserve firepower should Europe’s debt crisis worsen, and others including Singapore and Hong Kong acting to prevent asset-price bubbles. Taiwan’s monetary policy is “adequately loose,” Governor Perng Fai-Nan said last month after holding the benchmark rate for a fifth meeting to damp inflation.
Taiwan’s inflation slowed for a second month in October after accelerating to a four-year high in August. The government today kept its forecast for price gains this year at 1.93 percent and raised its estimate for next year to 1.27 percent from 1.25 percent.
President Ma Ying-jeou’s approval rating stayed at a record-low 13 percent in October, according to a survey last month by TVBS Poll Center, as the island’s jobless rate held at 4.3 percent last month, the highest in more than a year.
As a new leadership takes charge in China, the focus is on economic cooperation, especially to realize the agreements signed under the Economic Cooperation Framework Agreement, or ECFA, a spokesman said before the start of the 18th Communist Party Congress in Beijing earlier this month.
The deals may boost Taiwan’s exports to China, which rose 11.9 percent in September from a year earlier, the most in nearly a year. Export orders, an indicator of shipments in the next one to three months, climbed more than estimated in October.
Strong demand for smartphones helped Taipei-based Hon Hai Precision Industry Co., the world’s largest contract manufacturer of electronics, post a bigger-than-expected third-quarter profit.
“Global technology demand has bottomed out,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the report. “We should see improving production and exports, and that’s coming from improved U.S. demand and also China.”