Boston, MA -- (ReleaseWire) -- 05/05/2014 -- Taiwan's economy grew strongly in Q4 2013, with real GDP growth printing a seasonally-adjusted 2.4% quarter-on-quarter (q-o-q), accelerating sharply from 0.3% in Q3 2013. On an annual basis, real GDP growth expanded 2.9% compared to 1.7% during the same period, strongly surpassing consensus estimates of 1.9%. This brought 2013 full-year growth to 2.2%, in line with our forecast of 2.1%. The absence of a breakdown of the quarterly growth figure has prevents us from detailing the main drivers of growth in the last quarter.
Politically, ever since Ma Ying-jeou assumed the presidency in 2008, cross-Strait relations between Taiwan and China have improved markedly, with both economic and political ties reaching their warmest in decades. President Ma has been pursuing an 'economics first, politics later' policy and gravitating away from the independence-leaning policies of his predecessor Chen Shui-bian (2000-2008) of the DPP. This will undoubtedly have a beneficial effect on Taiwan's freight industry if the strengthening ties result in increased infrastructure spending to better link the two nations.
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In 2014, Taiwan is set to emerge from a trying 12 months with the contractions in various freight modes set to be reversed. Leading the recovery will be the air freight sector with year-on-year (y-o-y) growth set to come in at just under 3%, following 2013's contraction of 1.79%. Road freight will also enjoy y-o-y growth of over 2%, while the other modes will see slightly slower gains this year.
Headline Industry Data
- 2014 airfreight tonnage is expected to grow by 2.9% to 1.151mn tonnes.
- 2014 rail freight is forecast to rise by 1.5% to 11.334mn tonnes.
- 2014 road freight is forecast to increase by 2.1% to 677.467 tonnes.
- 2014 Port of Kaohsiung tonnage throughput forecast to recover by 1.5% to 117.420mn tonnes.
- Port of Keelung will see tonnage recovering by 0.6% in 2014, to 69.791mn tonnes.
- 2014 total trade is forecast to rise by 2.8% in real terms, compared to weaker 1.8% growth in the preceding year.
Key Industry Trends
Taiwan Looks To Lessen Chinese Dependence - Diversification is the order of the day for Taiwan as it seeks to reduce its dependence on China and open up new trade opportunities with the ASEAN region countries. Lin Chu-Chia, deputy minister in Taiwan's Mainland Affairs Council explained to Cargonews Asia that 'the member states of the Association of Southeast Asian Nations (ASEAN) region are important for us.' He added that free trade agreements (FTAs), such as the ones recently signed with New Zealand were very important: 'FTAs are a good way to increase trade and economic ties with the ASEAN countries. We are working in that direction.'
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