Taiwan Q3 preliminary GDP estimate likely to deliver pleasant surprises, says DBS Bank

Taiwan’s preliminary estimate of third-quarter gross domestic product (GDP) is expected to deliver pleasant surprises. The eventual pickup in domestic demand, coupled with the strong expansion in exports, augur well for the GDP results in Q3, according to a recent report from DBS Group Research.

There are now more notable signs that the labor market is recovering. The seasonally-adjusted unemployment rate fell further to 3.70 percent in September, down from 3.75 percent in the prior month and back to the levels in early-2015 (before the economy entered a sharp downturn caused by China’s slowdown).

Wage growth has also exhibited a clearer uptrend. Average regular earnings for all employees in all industries increased by 1.9 percent y/y in August, the fastest pace over 2.5 years. This is close to the 2 percent wage rise seen in 2014, when the economy stayed on a strong up-cycle and GDP growth advanced at 4 percent. The fuller recovery in the labour market has boosted confidence and encouraged consumers to spend.

Consumer confidence index climbed to a 22-month high of 82.2 in September, thanks to rising expectations for the general economic climate, employment opportunities, household financial conditions and stock market investment prospects. Retail sales, the key monthly indicator for consumption expenditures, posted solid gains of 2-3 percent m/m s.a. consecutively in August and September.

Meanwhile, FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest