Goldman Optimistic On GDP Data

Goldman Sachs says: "Taiwan will release advance Q2 GDP estimates next Friday. For Q2, we expect real GDP to contract 1.3% qoq non-annualized s.a., reversing from +3.3% qoq in Q1. This implies a year-on-year growth of 8.2% in Q2, well above consensus (Bloomberg consensus: +6.2%), moderating from 8.9% yoy in Q1. Manufacturing activities were largely unaffected given relatively solid growth in industrial production. However, consumption fell due to disruptions from COVID-19 outbreak since mid-May—we expect private consumption to contract 4% qoq sa in Q2, as suggested by declines in retail sales, restaurant revenue and employment in May. Fixed investment growth likely moderated sharply as evident from a slower growth in import volume of machinery equipment, a decline in construction PMI and housing permits. On external demand, monthly customs data suggest that sequential growth of both exports and imports volume remained solid but decelerated in Q2."