Business

Taiwan economy booms in Q3 after coming out of recession

Taiwan

TAIPEI: Taiwan’s economy grew at the fastest pace in more than a year during the July-September period, data showed Friday, fuelled by a strong recovery in the electronics sector.

The 2.06 percent year-on-year growth, which beat expectations, was the best performance since the first-quarter of 2015 when the economy expanded 4.04 percent.

The second straight quarter of growth is encouraging for the island, which just came out of recession in April-June.

Traditionally an export-driven technology hub, Taiwan is home to industry giants such as Foxconn and Taiwan Semiconductor Manufacturing Company (TSMC) — key suppliers for Apple’s iPhone.

The statistics bureau said Friday that quarterly exports turned positive for the first time in more than a year thanks to a 12.3 percent growth in electronics shipments.

“The export growth is driven by a turn in the semiconductor market and new mobile device products,” the Directorate-General of Budget, Accounting and Statistics said in a statement.

Revived electronics demand also led semiconductor companies to expand manufacturing capabilities, boosting national investments.

“We feel this Apple-led strength may support activity in the fourth quarter,” said Barclays analyst Angela Hsieh.

Hsieh says the biggest surprise from Friday’s data release was the 2.37 percent growth in private consumption.

But she is worried about how the recent decline in the number of Chinese visitors will affect the economy, as the number of mainland tourists dived 28.4 percent in the third quarter.

“If the pace of decline continues, this could trim growth by 0.17 percentage points next year,” she said.

Taiwan’s tourism sector suffered the worst summer in 13 years due to a slump in mainland visitors as relations with China deteriorate under Beijing-sceptic President Tsai Ing-wen.

Thousands of workers in the tourism industry took to the streets last month, bemoaning half-empty hotels and idle tour buses.

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