Taiwan raises 2018 GDP outlook

TAIPEI: Taiwan raised its 2018 economic growth forecast on Friday for the second time this year, as the economy continued a steady expansion helped by exports and increased private investment.

The trade-dependent economy grew at its fastest pace in nearly three years in 2017, gaining from strong orders for semiconductors and other electronics, but there are concerns momentum may slow as the technology cycle peaks.

Taiwan´s factories play a major role in the global tech supply chain.

The government raised full-year 2018 growth to 2.60 percent from 2.42 percent forecast in February.

The outlook was increased from an earlier 2.29 percent forecast in November.

First quarter annual GDP growth was revised slightly lower to 3.02 percent from a preliminary 3.04 percent.

"Benefitting from global economic stability and growth, as well as technology application momentum, the semiconductor market is flourishing and the demand for machinery was hot," the Directorate General of Budget, Accounting and Statistics said in a statement.

A statistics agency official told a news conference that chipmaker Taiwan Semiconductor Manufacturing Co Ltd´s upwardly revised capital expenditure this year and airlines´ plans to purchase aircraft were major reasons behind the government´s brighter 2018 GDP outlook.

The government forecast that exports would grow 6.36 percent in 2018, compared with a 13.2 percent expansion in 2017. Exports contracted 1.8 percent in 2016 and 10.9 percent in 2015.It also nudged up its inflation estimate for 2018 to 1.49 percent from 1.21 percent previously.

While some economists see growing risks from trade protectionism and higher oil prices, others said economic momentum would likely hold up this year.