The economy grew a tepid 0.64 percent last quarter, the slowest in 12 quarters and much weaker than the government’s estimate in May of 3.05 percent, as a downturn in the global electronics cycle and crude prices hurt exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) aid yesterday.
The disappointing results raised concerns if GDP growth of more than 2 percent this year is attainable, with downside risks building at home and abroad, economists said.
On a quarterly basis, the economy contracted 1.97 percent from the first quarter. It also retreated 7.65 percent from a year ago after seasonal adjustments, the DGBAS report showed.
Photo: Cheng Chi-fang, Taipei Times
“The nation’s export-reliant economy is struggling to achieve growth of above 2 percent this year, as achieving 3 percent growth looks impossible,” Taiwan Institute of Economic Research (台經院) economist Gordon Sun (孫明德) said by telephone.
The statistics agency attributed the weak showing mainly to exports, Sun said.
External demand sapped GDP growth by 2.07 percentage points last quarter, as electronic firms cut inventory in light of poor sales, while cheaper oil curtailed demand for non-tech exports, DGBAS section chief Wang Shu-chuan (王淑娟) said.
Adding to the headwinds, Chinese tourism dropped 2.92 percent during the April-to-June period, terminating 15 consecutive quarters of increase, Wang said.
Inbound tourism, as a whole, gained a mere 1.55 percent, the report showed.
For the first six months of the year, GDP expanded 2 percent, according to DGBAS statistics, lagging behind South Korea and Singapore.
Hong Kong has yet to release second-quarter figures.
Domestic demand was the sole engine of growth last quarter, contributing 2.71 percentage points to GDP growth, as private consumption and capital formation increased 2.81 percent and 5.42 percent respectively, better than the projections in May, the report said.
The financial industry made the greatest contribution to GDP growth last quarter, while the manufacturing, wholesale and retail industries lagged behind, the report showed.
Financial institutions saw their income gain 5.8 percent last quarter, lending 0.41 percentage points to GDP growth, thanks to a hefty increase in fee income and first-year premiums, the report found.
Last quarter’s grim economic reading prompted Australia and New Zealand Banking Group (ANZ) to cut its growth forecast for Taiwan for the second time in a month to 1.94 percent for this year, from the 2.81 percent it estimated on July 7.
“As growth slowed significantly last quarter, it would require a solid recovery in the second half to achieve the revised growth rate,” ANZ Hong Kong-based economist Raymond Yeung (楊宇霆) said.
Major technology firms recently gave conservative forecasts for their business going forward, which are also unfavorable for the economy.
The DGBAS is due to update its growth forecast later this month.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)