Taiwan GDP Misses Estimates as Economists See Momentum for 2015

Taiwan’s economic growth slowed more than forecast last quarter as a food scandal weighed on demand.

Gross domestic product rose 3.17 percent from a year earlier in the three months through December, according to preliminary data the statistics bureau released in Taipei Friday. While that missed the 3.25 percent median estimate in a Bloomberg survey of analysts and declined from 3.63 percent in the prior quarter, the seasonally adjusted quarterly rate rose to 1.17 percent, the fastest pace in a year.

Scandals over the use of tainted oil in food weighed on consumption last quarter, while mineral and plastic product shipments shrank as cheaper oil curbed demand. Still, economists are pointing to prospects for faster export growth driven by the electronics industry and a boost to consumer spending in the oil-importing economy from the plunge in crude.

“Any recovery in exports should feed through into strong investment growth,” Gareth Leather, an economist at Capital Economics Ltd. in London, wrote in a note after the release. “Falling oil prices should boost households’ real incomes.”

Taiwan’s exports, which account for about three-quarters of its economy, are mostly driven by an electronics industry that produces parts for brands including Apple Inc. While growth in China, its biggest market, has slowed to the least since 1990, demand from the U.S., its second-biggest one, is picking up.

Brent crude prices have slid 55 percent over the past year, helping to push down December’s inflation to a 10-month low. Economic growth of 3.51 percent last year, the statistics bureau said today, was the fastest since 2011.

Taiwan began compiling GDP using the United Nations’ System of National Accounts in the third quarter. The system re-classifies research and development expenditures as fixed investments, and uses the chain method to derive real GDP.

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