TAIPEI (Reuters) – Taiwan’s economy is forecast to have maintained relatively steady growth in the fourth quarter as the island benefited from a rebound in demand for electronic gadgets thanks to fading concerns over the U.S.-China trade war, a Reuters poll showed.
The export-reliant economy has been hit by the bruising tariff dispute between China and the United States, its two largest trading partners. Yet, recovering demand for high-end smartphones and factory relocations to Taiwan have helped stabilize growth.
Gross domestic product probably expanded 2.78% in October-December compared with a year earlier, the poll of 15 economists predicted, down a little from 2.99% in the third quarter.
Preliminary fourth quarter figures will be released on Tuesday. Revised figures, including details and government forecasts, will be published about three weeks later.
Despite its heavy reliance on exports, Taiwan’s economy bucked a regional growth slowdown last year. It was named in a U.N. study as the largest beneficiary of “trade diversion” amid the U.S.-China trade war, as companies moved production from China to Taiwan to avoid higher tariffs.
Taiwan slightly raised its 2019 economic growth forecast to 2.64% and predicted faster growth of 2.72% in 2020, citing “positive effects” of factory relocations.
Taiwan President Tsai Ing-wen won a landslide re-election last week, which analysts say points to prolonged frosty relations with China, which considers the island its own.
Yet, overall economic growth is seen relatively unscathed by political tensions with Beijing.
“Given that policy continuity is expected, we keep our economic outlook of a moderate rebound into 2021 unchanged,” Euler Hermes economists wrote in a report, citing Tsai’s bid to boost the island’s technology and green energy sector.
In a further sign of recovering demand Taiwan’s electronic gadgets, a Reuters poll showed December export orders, a leading indicator of demand for Asia’s exports and for hi-tech gadgets, likely rose for the first time in 14 months.
(Poll compiled by Carol Lee; Reporting by Yimou Lee; Editing by Shri Navaratnam)