Taipei, Aug. 1 (CNA) British bank Barclays Plc cut its forecast for Taiwan's economic growth in 2012 Wednesday, a day after the government reported disappointing gross domestic product (GDP) growth in the second quarter of this year.
Taiwan's economic growth contracted 0.16 percent year-on-year in the April-June quarter, well below the 0.77 percent growth previously forecast, according to government figures released Tuesday.
Barclays said it lowered its full-year GDP growth forecast to 1.7 percent from 3 percent because of continuing weakness in external demand, lower support for domestic demand from financial assets and more severe production disruptions.
Barclay's forecast was slightly below the government's revised growth estimate of 2.08 percent announced Tuesday.
"In view of the weaker guidance from chip and PC makers, we are tempering our view of a stronger cyclical upturn ahead," Leong Wai-ho, a Singapore-based economist at Barclays, wrote in a statement.
"We still expect momentum in industrial production and exports to accelerate in the third quarter, albeit at a more subdued pace," he said.
Barclays also trimmed its expectations for capital expenditure and capital formation, given that a number of semiconductor manufacturers have lowered their guidance for sales.
The bank believed the weak second-quarter growth is likely to add impetus for the government to unveil plans for additional infrastructure investment later in August.
(By Jeffrey Wu)