*
2023 GDP estimate +2.12%, vs previous forecast +2.75%
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2023 exports estimate -5.84% y/y, from -0.22%
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Q4 GDP revised up to -0.41% y/y, from -0.86%
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2022 GDP revised up to +2.45% y/y, from +2.43%
(Adds analyst comment in paragraph 7, byline)
By Jeanny Kao and Meg Shen
TAIPEI, Feb 22 (Reuters) - Taiwan's trade-dependent
economy is likely to grow more slowly this year than previously
forecast, hit by a slump in exports on weakening external demand
due to global inflation, rate rises and impact of the war in
Ukraine, the government said.
Taiwan, home to major tech companies including the world's
largest contract chip maker TSMC , has seen exports
contract for five months in a row as consumers tighten their
purse strings around the world, while China, Taiwan's largest
export market, has yet to bounce back from COVID-19-related
turmoil.
Taiwan's gross domestic product (GDP) for 2023 is now
expected to be 2.12% higher than last year, the Directorate
General of Budget, Accounting and Statistics said on Wednesday,
revising down the 2.75% forecast it issued in November.
That would mark a slowdown from the 2.45% logged for 2022,
which was itself far slower than 2021's 6.53% expansion.
"Under the influence of monetary tightening by various
countries to combat inflation and the stalemate in the
Russia-Ukraine war, terminal consumer demand has weakened,
product prices have fallen, industrial supply chain inventories
have been adjusted, and global economic growth has slowed," the
statistics agency said.
It now sees 2023 exports down 5.84% on last year, compared
with a 0.22% contraction predicted earlier.
Kevin Wang, an economist at Taishin Securities
Investment Advisory Co, said the economy could even struggle to
grow faster than 2% this year, though exports were likely to
pick up in the second half.
Compounding the potential pain ahead for Taiwan, the office also revised up its 2023 inflation outlook, meaning the central bank could continue to hike interest rates. The office sees this year's consumer price index 2.16% higher than last year, compared with a previously forecast rise of 1.86%. "If CPI in February remains stuck at about 3%, there is a higher chance the central bank will raise interest rates in the first quarter," Wang said. The central bank holds its next scheduled rate setting meeting on March 23.
However, Taiwan's economy in the last three months of 2022 did not perform as poorly as initially reported. In the fourth quarter, GDP shrank by a revised 0.41% on a year earlier, the agency said, revising up a preliminary reading of a 0.86% contraction. (Reporting by Jeanny Kao and Meg Shen; Additional reporting by Emily Chan and Faith Hung; Writing by Ben Blanchard; Editing by Kim Coghill)
