The economy grew by a weaker-than-expected 0.85 percent last year, dragged down by persistent sluggish foreign and domestic demand, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Annual GDP growth missed the agency’s estimate of 1.06 percent, representing the weakest pace since the 2009 global financial crisis.
The DGBAS attributed the weakness to the performance in the final quarter of last year, with the economy shrinking by 0.28 percent year-on-year, lagging far behind the agency’s forecast of 0.49 percent growth.
Photo: CNA
It was the second consecutive quarter that GDP contracted, indicating that the nation entered recession in the second half of last year, agency statistics showed.
Softer-than-expected exports and domestic consumption contributed to the 0.28 percent contraction last quarter, DGBAS section chief Wang Shu-chuan (王淑娟) told a media briefing.
STIMULUS
However, the scale of the decline last quarter narrowed from the previous quarter’s annual drop of 0.63 percent, Wang said, adding that the government’s short-term stimulus measures had a positive effect on domestic demand.
Domestic demand — covering private consumption, government consumption and capital formation — increased 0.88 percent last quarter from a year earlier and contributed 0.8 percentage points to headline growth, data showed.
Private consumption advanced 1.64 percent year-on-year last quarter and public consumption increased 0.17 percent annually, but capital formation shrank by 0.44 percent, weighed down by the decline in construction investments and inventory correction in the electronics sector, the DGBAS said.
Given a weak global economy, persistent inventory digestion in the electronics sector and rising competition from China, Taiwanese exports plunged 2.8 percent last quarter from a year earlier, the agency said.
Falling agricultural and industrial materials prices and weak demand for exports caused the nation’s imports to fall by 1.64 percent annually last quarter, it said.
Overall, external demand dragged down economic growth by 1.1 percentage points, outweighing the 0.8 percentage points contribution from domestic demand, the DGBAS said.
RISKS TO GROWTH
Australia and New Zealand Banking Group (ANZ) warned of significant downside risks to Taiwan’s economic outlook in the near term.
Citing Apple Inc’s forecast of falling sales for this quarter, ANZ said the outlook for the nation’s bellwether electronics industry is uncertain.
“Prospects for the technology market and its competitive landscape will continue to affect Taiwan’s growth outlook in the near term,” ANZ Hong Kong-based economist Raymond Yeung (楊宇霆) said in a report.
ANZ is keeping its forecast of 2 percent growth for this year, Yeung said.
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