TAIPEI Reuters-Taiwan's economy will grow at its fastest pace in more than a decade in 2021, the statistics office said on Friday, boosting its outlook on an expected strong performance in exports for the tech heavyweight island, though supply chain issues may weigh.
The statistics office nudged up its export growth forecast for the year, with global demand for island technology products buoyed by 5 G, electric vehicles and high end computing.
Gross domestic product GDP is expected to rise 6.09% this year, the fastest pace since it expanded 10.25% in 2010, according to the Directorate General of Budget, Accounting and Statistics. Its growth forecast was 5.88% in August.
The office said that GDP growth reached 4.15% for the year 2022, up from 3.69% predicted in August.
The directorate's deputy head Tsai Hung-kun said supply chain problems would affect exports in the fourth quarter, but trade growth and domestic consumption would help buoy the economy next year.
Tsai said that external demand for next year is not bad.
His office said that exports rose 28.88% from 2020, up slightly from the previous prediction of 28.15%, while for next year it saw exports increase by 6.14%, from 5.22% seen before.
Fitch Solutions said earlier on Friday it retained its expectations for 6% growth this year, but said it would slow to 2.7% next year, with supply chain issues impacting exports.
It added that if supply side issues persist, it could pose further downside risks to our real GDP growth forecasts, particularly with regard to the production of semiconductors.
Taiwan's export orders grew more slowly https: www.reuters. Com markets asia taiwan-oct export-orders - grow less than expected -- 2021 -- 11 -- 22 than expected in October due to supply problems in the tech sector.
Taiwan is a major producer of semiconductors, a global shortage of which has rattled auto makers and boosted Taiwan's corporate profits.
In the third quarter GDP increased by a revised 3.7% from a year earlier, slightly down from a preliminary reading of 3.8%, the agency said, having been impacted by a short-lived spike in domestic COVID 19 cases.