UPDATE 1-Taiwan upgrades 2021 economic view as Q1 growth jumps

(Recasts, adds details)

* 2021 GDP estimate raised to +5.46%, vs previous forecast +4.64%

* Q1 growth revised up to +8.92% y/y, from +8.16%

* Government sees 2021 exports +20.4% y/y, from +9.58%

TAIPEI, June 4 (Reuters) - Taiwan’s economy will grow at its fastest pace in more than a decade in 2021, the statistics office said on Friday, upgrading its outlook as a strong rebound in exports helps the island even as it deals with a spike in COVID-19 cases.

Gross domestic product (GDP) is expected to expand 5.46% this year, the Directorate General of Budget, Accounting and Statistics said, up from a forecast made in February for 4.64% growth, which would be its fastest since 2010’s 10.25%.

The revision came as the statistics office more than doubled its export growth forecast for this year, with global demand for the island’s technology products buoyed by a work-from-home boom during the COVID-19 pandemic.

Prices of micro chips have also been surging amid a worldwide shortage that is hurting industries from automobiles to consumer electronics.

GDP expanded by a revised 8.92% in the first quarter from a year earlier, the strongest quarterly growth in over a decade and up from a preliminary reading of 8.16%, the agency added, as the island’s economy outperformed many regional peers.

The agency said growth in the first quarter was boosted by electronics exports, which jumped 28% on year, thanks to global demand for new technologies as well as the work-from-home trend during the pandemic.

Strong investment, boosted by chip companies’ factory expansions, also contributed to growth in the quarter, the agency said.

Taiwan had for many months effectively controlled the coronavirus but is now dealing with a spike in domestic cases that has seen the government put curbs on gatherings and led to the closure of entertainment venues and in-restaurant dining.

Domestic consumption grew 4.66% in the first quarter, boosted by strong sales from retail and the food and beverage sectors before the recent virus cases, and the agency warned consumption would take a hit from the pandemic.

Taiwan’s electronics exports are a bellwether of demand for global tech giants such as Apple Inc.

The statistics agency forecast exports in 2021 would rise 20.4% compared with last year, more than double a previous prediction of 9.58%. (Reporting by Jeanny Kao and Yimou Lee; Writing by Ben Blanchard; Editing by Robert Birsel)