Taiwan's 2nd Quarter GDP Forecast Is 0.8%, According To Analysts
Taiwan is one of those countries which are dependent on their export sector for GDP growth. According to a recent poll of analysts, the country's economy is forecasted to show positive growth during Q2 2023.
Overall, Taiwan's GDP is expected to expand by 0.8% during 2nd quarter (April - June) when compared with the same period last year. During Q1 2023, the country's GDP actually contracted by 2.87%, which pushed the economy into recession.
For the most part, the analyst's views are pretty mixed about the upcoming GDP numbers. Some are calling for a 0.2% contraction, while others are hinting at 2.0% growth. But the average number is a GDP growth 0f 0.8% for the 2nd quarter.
Taiwan's Exports At 14 Year Lows
During June 2023, the exports of Taiwan hit a new low and were at one of their lowest point in the last 14 years. At the same time, the government believes that growth will only return by November 2023.
For the 2nd quarter, a 16.9% decline in exports was recorded when compared with the same period last year. But despite the decline, that's still an improvement given the 19.2% contraction during the 1st quarter.
According to Yuanta Investment Consulting, the domestic consumption of Taiwan was not that bad during Q2 2023. For the 3rd quarter, they believe that the decline in exports will continue to become less and less each month. At the same time, the chances of a September rate hike are also very low.
In May, Taiwan's government announced a 2.04% GDP growth for the year 2023. Even if this target is achieved, that will be one of the slowest growths in the last 8 years.
Similarly, the Bank DBS has also downgraded Taiwan's yearly GDP growth outlook. According to them, the economy will expand by 0.5% during 2023 as compared to an earlier forecast of 1.6%.
If we look around, China's economy grew 6.3% during the 2nd quarter. So that's yet another factor that will help Taiwan as China is one of its largest export markets.