Taiwan's economy surges 12.5 percent in 2Q

[August 19, 2010]  TAIPEI, Taiwan (AP) -- Taiwan's export-reliant economy surged 12.5 percent year-on-year in the second quarter on strong foreign demand for the island's electronics, the government said Thursday.

It was Taiwan's third consecutive quarter of expansion since its economy emerged from the global recession, the Directorate General of Budget, Accounting and Statistics said.

The Directorate General raised its growth forecast for 2010 from 6.1 percent to 8.2 percent, saying the island's exports could reach a record high of $271.3 billion this year. Exports grew 40.2 percent in the second quarter.

Looking ahead, officials are wary that a slowdown in China's economy may have a negative impact on Taiwan. China reported earlier this month that industrial growth slowed in July to its lowest level this year.

The agency expects Taiwan's economic growth to slow to 4.6 percent in 2011.

Taiwan is a major source of components for Chinese factories that make televisions and other electronics, many for export to the United States. The island could suffer a double blow as Chinese and U.S. spending weakens at the same time.

"I expect to see smaller economic growth for quarter two than quarter one, and the upcoming quarters will again see smaller growth than quarter two," Hu Chung-ying, vice chairman of the Cabinet's Council for Economic Planning and Development, said last week.

[Associated Press]

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