Taiwan's economy grew a better-than-expected 5.02 percent in the second quarter of 2011 due to strong exports and domestic spending, but it is losing momentum, the government said Thursday. The figure was higher than the 4.88 percent growth figure given when the Directorate General of Budget, Accounting and Statistics released its preliminary estimates last month.
Exports, the island economy's major growth engine, rose 14.62 percent year-on-year as overseas demands for electronics, information and telecommunications products, and machinery were brisk, it said. However, the agency lowered the 2011 full year growth forecast to 4.81 percent from 5.01 amid growing uncertainty in the international economic outlook.
"The adjustment downward of the full-year forecast is expected as the global economies are facing an increasing number of uncertain factors. Taiwan cannot possibly avoid being impacted," said Cheng Cheng-mount, a Citibank economist. The anticipated slowdown will in part result from a year-on-year 8.43 percent decline in private sector investment in the second half this year, the agency said.
Also weighing down the economy is the partial shutdown of Formosa Plastic Group's naphtha cracking complex at Mailiao on the west coast - the biggest petrochemical complex on the island - after a string of fires, it said. The agency forecast Taiwan's economy would grow 4.58 percent in 2012.
The figures follow a better-than-expected 6.16 percent rise in the first quarter of the year, also on the back of robust exports. Taiwan's economy last year expanded 10.88 percent, a 24-year high, fuelled by rapid growth in China, the island's main trading partner.
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