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.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
RSS