GDP slows

GDP in 3Q grew at 2.28% year-on-year, close to our forecast of 2.0% but below the 3.3% pace in 2Q and the 3.1% rate in the first quarter. Consumption contributed only 0.998 percentage points, which is a downward surprise to us as we expected spending to prop up the economy during the trade dispute.

Instead, most of the GDP growth came from investment, which we believe is from an increase in inventories (this will be clearer when the data is updated in November). If that is the case, it means that Taiwan growth is worse than the official statistics suggest.