The economy contracted for the first time in six years last quarter, falling 1.01 percent from the same period last year, as exports faltered due to a global slowdown and private consumption failed to lend support, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Despite the sharper-than-consensus-estimated decline of 0.5 percent, the nation narrowly dodged a recession — defined as two consecutive quarters of negative growth.
On a seasonally adjusted annual basis, the economy grew 0.21 percent last quarter, recovering from a 6.56 percent fall in the preceding quarter, DGBAS data showed.
Photo: Pichi Chuang, Reuters
“The economy panned out weaker than expected as both external demand and private consumption stalled,” DGBAS section chief Wang Shu-chuan (王淑娟) told a media briefing.
In August, the statistics agency forecast growth of 0.1 percent year-on-year for the third quarter.
The government will have to revise down its full-year GDP growth forecast, which the agency projected would expand 1.56 percent, Wang said.
The DGBAS is to update its GDP figures next month.
The weak GDP data dampened investor confidence, leading the TAIEX to close 0.2 percent lower at 8,554.31 points.
Exports, which drive 70 percent of the economy, declined 2.85 percent year-on-year last quarter, dragging down GDP by 2 percentage points, the DGBAS report showed.
Domestic demand failed to make up for disappointing exports, rising a mere 0.11 percent as retail sales dropped 1.93 percent from the previous year, also the first contraction since the third quarter of 2009, the report said.
Visitors to major tourist attractions dropped 8.99 percent year-on-year in July and August, and new car licenses shrank 7.88 percent last quarter, it said.
Capital formation — net additions of equipment, buildings and other intermediate goods — declined 1.25 percent last quarter from the previous year, as manufacturers cut inventories and real-estate companies shied away from new construction projects, the report said.
In terms of production, the manufacturing industry fell 3.1 percent last quarter, while the construction industry slumped 6.54 percent, the report said.
The financial and insurance sectors also experienced a soft patch, shrinking 0.51 percent from the same period last year.
Economists yesterday said the nation would remain sensitive to economic dynamics in China and the US.
Australia and New Zealand Banking Group (ANZ) expects Taiwan to benefit from increasing Chinese domestic demand and innovations originating in the US would serve as a catalyst for the local semiconductor industry, ANZ Hong Kong-based economist Raymond Yeung (楊宇霆) said.
Tony Phoo, (符銘財), Taipei-based economist at Standard Chartered Bank, said the local job market remained stable last quarter, despite weak exports, which should provide support for domestic demand.
TRAGEDY STRIKES TAIPEI: The suspect died after falling off a building after he threw smoke grenades into Taipei Main Station and went on a killing spree in Zhongshan A 27-year-old suspect allegedly threw smoke grenades in Taipei Main Station and then proceeded to Zhongshan MRT Station in a random killing spree that resulted in the death of the suspect and two other civilians, and seven injured, including one in critical condition, as of press time last night. The suspect, identified as a man surnamed Chang Wen (張文), allegedly began the attack at Taipei Main Station, the Taipei Fire Department said, adding that it received a report at 5:24pm that smoke grenades had been thrown in the station. One man in his 50s was rushed to hospital after a cardiac arrest
A car bomb killed a senior Russian general in southern Moscow yesterday morning, the latest high-profile army figure to be blown up in a blast that came just hours after Russian and Ukrainian delegates held separate talks in Miami on a plan to end the war. Kyiv has not commented on the incident, but Russian investigators said they were probing whether the blast was “linked” to “Ukrainian special forces.” The attack was similar to other assassinations of generals and pro-war figures that have either been claimed, or are widely believed to have been orchestrated, by Ukraine. Russian Lieutenant General Fanil Sarvarov, 56, head
SAFETY FIRST: Double the number of police were deployed at the Taipei Marathon, while other cities released plans to bolster public event safety Authorities across Taiwan have stepped up security measures ahead of Christmas and New Year events, following a knife and smoke bomb attack in Taipei on Friday that left four people dead and 11 injured. In a bid to prevent potential copycat incidents, police deployments have been expanded for large gatherings, transport hubs, and other crowded public spaces, according to official statements from police and city authorities. Taipei Mayor Chiang Wan-an (蔣萬安) said the city has “comprehensively raised security readiness” in crowded areas, increased police deployments with armed officers, and intensified patrols during weekends and nighttime hours. For large-scale events, security checkpoints and explosives
PUBLIC SAFETY: The premier said that security would be tightened in transport hubs, while President Lai commended the public for their bravery The government is to deploy more police, including rapid response units, in crowded public areas to ensure a swift response to any threats, President William Lai (賴清德) said yesterday after a knife attack killed three people and injured 11 in Taipei the previous day. Lai made the remarks following a briefing by the National Police Agency on the progress of the investigation, saying that the attack underscored the importance of cooperation in public security between the central and local governments. The attack unfolded in the early evening on Friday around Taipei Main Station’s M7 exit and later near the Taipei MRT’s Zhongshan
RSS