The magnitude of the slump in the first quarter showed that the nation is in a deeper recession than the market expected, prompting economic officials to suggest sizing up the economy on a quarterly basis rather than on a year-on-year basis.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) announced on Thursday that the economy contracted by an unprecedented 10.24 percent between January and March from the same period last year.
The dismal showing led the statistics agency to revise the GDP forecast for this year to a decline of 4.25 percent from a 2.97 percent contraction predicted in February.
Council for Economic Planning and Development Chairman Chen Tain-jy (陳添枝) told a press conference later on Thursday that GDP dipped 0.37 percent based on a quarterly annualized formula, and would show improvement for the rest of the year.
Chen said the formula, which has been instituted in the US, Japan and Singapore, could better capture economic trends.
GDP shrank by 3.84 percent in the third quarter of last year from a 4.56 percent expansion a quarter earlier, indicating a severe downturn, Chen said.
The DGBAS has promised to compute economic data using both formulas starting in November, when third-quarter figures will be published.
Wu Ming-huei (吳明蕙), a CEPD section chief responsible for tracking business cycles, said the council has long adopted the annualized formula to monitor economic indicators.
“The quarterly annualized rate can better detect shifts in business cycles,” Wu said by telephone on Friday. “It is also a better tool to monitor the recession.”
Gauged quarter-on-quarter, GDP growth is likely to turn positive this quarter as the slump has slackened.
DGBAS predicted the contraction would persist but slow to 8.5 percent and 2.98 percent in the second and third quarters respectively, and reverse to a 5.2 percent growth in the fourth quarter, when compared with the same period last year.
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