Why Taiwan's GDP growth forecast is likely to be trimmed down

Expect a revision to 3% or lower.

According to DBS, the government is expected to downgrade the 2013 growth forecast this Friday when announcing the final estimate of the 1Q GDP.

It will be no surprise to see a revision to 3.0% or even lower, significantly down from the current forecast of 3.59%.

Here's more from DBS:

Growth slowed in the beginning quarter of this year after a temporary acceleration in 4Q12. Given a lacklustre global economic environment, momentum in Taiwan’s export-oriented manufacturing sector will likely remain weak in 2Q.

PMI has stayed marginally higher than 50 for five consecutive months as of April (50.0-51.5). Based on the PMI survey, new orders and production amongst Taiwanese manufacturing firms continued to increase in April, but the rate of expansion was modest and it has slowed slightly compared to the previous month.

Accordingly, April’s key economic data to be released this week will likely remain discouraging. We expect export orders to fall -2.3% and industrial production to slip -0.1% YoY.