Taiwanese economic growth likely to have slowed down year-on-year in Q3 2018

The Taiwanese economic growth data for the third quarter is set to be released tomorrow. According to a DBS Bank research report, the economy is likely to have expanded 2.5 percent year-on-year. This would be a moderate deceleration from the second quarter’s 3.3 percent. However, the sequential growth is likely to have accelerated a bit in the third quarter to 2.4 percent from 1.6 percent.

Exports, on a year-on-year basis, decelerated in the September quarter as global demand weakened and seasonal impact in the electronics sector was not as solid as last year. Consumption indicators also weakened in the midst of the sluggish stock market performance and the softening consumer sentiment.

Investment growth seems to have accelerated slightly in the third quarter; however, greatly aided by the low base effect. Owing to the solid growth seen in the first half of the year, the economy is expected to grow 2.7 percent in the whole of 2018.

“Considering that the US-China trade war may start to hurt the regional supply chain and the Fed tightening would cause more financial strains in global emerging markets next year, we expect lower GDP growth for Taiwan in 2019, at 2.2 percent”, added DBS Bank.