Taiwan Economy Sees Biggest Growth in Over 30 Years

Taiwan said on May 20 its economy grew at its fastest pace in more than 30 years during the first quarter of 2010 thanks to strong demand for exports in markets such as China. The 13.27% year-on-year jump in GDP cements the island's recovery from its worst economic crisis since WWII and was helped by a rebound in world trade after the global downturn.

The figure, compared with a contraction of more than 9% in the same period last year, is the highest for Taiwan since the fourth quarter of 1978, the government said.

Taiwan's economy also picked up thanks to an increase in domestic demand, the agency said.
"It benefited from strong growth in China and other emerging economies in Asia."

Exports expanded 43.7% from a year earlier in the first quarter. "The strong growth was boosted by sharp increases in export orders," said Alex Huang, a Taipei-based analyst at Mega International Investment Services.

However, demand in the island of 23 million people was just as important in spurring growth, the agency added. "There was a clear rise in consumer confidence [in Taiwan] after the economic environment turned for the better," it said.

Private investment also boosted growth, increasing by 37.11% in the first quarter.

The government raised its forecast for full-year economic growth to 6.14% from the previous 4.72%, according to the agency.

The first quarter growth figure was announced as Taiwan prepared to enter a sweeping trade agreement with the mainland. Taiwan's export orders from the Chinese mainland and Hong Kong combined hit a high of $9.82 billion in April, a significant rise of 40.7% year-on-year, the economic ministry said.

Orders from the United States rose a year-on-year 23.58% to $7.08 billion, while orders from six of the 10 member states of the Association of Southeast Asian Nations surged 47.05% to $3.21 billion.

The government in Taipei aims to sign the pact with Beijing next month, saying it will bring growth and employment to Taiwan, but the opposition argues it will have the opposite effect and make the island more dependent on China.