Tech sector bellwether Taiwan's GDP beats views
Taiwan reported robust economic growth in the April-June period, though slowing imports raised concerns over the potential impact of heightened U.S.-China trade tensions.
Strong demand for electronic components and machinery from the island, home to major Apple Inc. suppliers Taiwan Semiconductor Manufacturing Co. and Foxconn Technology Co., or Hon Hai, helped the economy grow 3.29% in the second-quarter from a year earlier, official data showed Tuesday.
Second-quarter growth was expected to come in at 2.9%, according to five economists polled by The Wall Street Journal.
The island acts as a bellwether for the global tech sector as Taiwan exports key electronic components to major tech firms.
GDP expanded 3.08% on a quarter-over-quarter seasonally adjusted annualized basis, which offers a closer measure of the economy's recent momentum, compared with 0.79% in the first quarte r.
Economists tend to focus more on the island's year-over-year figures because of volatility of the sequential data and potential distortions in seasonal adjustment.
The economy expanded at a three-year high of 3.28% in the fourth quarter of 2017.
Consumption grew 2.65% on-year due to higher sales of jewelry and watches and financial services, as well as FIFA World Cup-related merchandise, the official statistics agency said in a press release.
Exports grew 3.78% on-year, while imports expanded by 2.25%.
ING's Greater China Economist Iris Pang said the pace of import growth was the slowest since the fourth quarter of 2017 when imports grew 0.8% on year.
"Exporters were cautious to import materials for manufacturing and therefore export growth in coming months should slow," she said. That could be attributed to worries over the U.S.-China trade spat, she added.
The government previously forecast the economy would e xpand by 2.6% in 2018.
Saurabh Chaturvedi contributed to this article.
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