TAIPEI: Taiwan's trade-reliant economy is expected to expand at a slower pace in the third quarter due to the island's COVID - 19 outbreak, a Reuters poll showed, though supported by export growth and healthy global demand for semiconductors.
Gross domestic product GDP likely expanded 4 per cent in the July-September period versus a year ago, the poll of 27 economists shows, after it grew 7.43 per cent year-on-year in the second quarter.
That would be its slowest rate of growth since logging 5.09 per cent in the fourth quarter of last year.
Domestic consumption was hit by a rare rise in community COVID - 19 transmissions starting mid-May and the imposition of strict restrictions on gatherings and other curbs. The outbreak has now ended and the government has been issuing shopping coupons to help restore consumer confidence.
Economists' forecasts for preliminary GDP data due on Friday varied widely from growth of 2.5 per cent to as high as 6.5 per cent.
Kevin Wang, an economist at Taishin Securities Investment Advisory Co, said the drop-off in growth was because of the impact on consumption at home from COVID - 19 outbreak.
At present, although exports in the third quarter have eased, they are still not bad. Investment seems to be OK too, he added.
Firms like Taiwan Semiconductor Manufacturing Co Ltd TSMC have also seen demand soar from a global shortage of chips that has shuttered some auto production lines and affected consumer electronics.
Exports in September were the highest monthly figure on record, rising an expectation beating 29.2 per cent from a year earlier to US $39.65 billion.
The government has remained bullish about Taiwan's full-year GDP prospects though, with policymakers including the central bank governor saying it could grow 6 per cent this year, higher than current official forecasts.
The International Monetary Fund raised its forecast for Taiwan's 2021 growth to 5.9 per cent from 4.7 per cent seen in April.
However, the economy in Taiwan, Taiwan's top trading partner, grew at the slowest pace in the third quarter in China, 4.9 per cent from a year earlier, hurt by power shortages, supply bottlenecks and sporadic COVID - 19 outbreaks.
Taiwan's minimal figures will be released in a statement with preliminary commentary. Revised figures will be released later in November with more details and forward-looking forecasts.