The economy grew 1.76 percent annually last quarter, missing a government forecast from November last year by 0.26 percentage points as smartphone sales disappointed amid a global economic slowdown, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said on Thursday.
The GDP showing was the softest in 10 quarters as the export-oriented economy took a hit from a lingering trade dispute between the US and China.
The world’s two largest economies account for about half of Taiwanese shipments of electronic components — mainly chips, camera lenses, touchpanels, batteries, casing and other parts used in smartphones, laptops, TVs and consumer electronics.
“Smartphone sales turned out weaker than expected in the final quarter of last year as the world economy showed signs of a slowdown,” the statistics agency said in a report.
Exports edged up a fractional 0.1 percent during the October-to-December period from a year earlier, but over the full year saw a 5.9 percent pickup.
Shipments of electronic parts and optical products contracted 4.91 percent and 11.76 percent respectively last quarter from the same period in 2017, the report said.
Imports of agricultural raw materials advanced by double-digit percentage points, but capital equipment purchases continued to decline as firms turned conservative about their business outlooks, it said.
External demand was the main growth driver in the first half of last year, but last quarter pushed down GDP growth by 1.38 percentage points, the report said.
That left only domestic demand to drive economic growth, despite lackluster sales of automobiles, home appliances and communication devices, it said.
Local elections on Nov. 24 last year helped boost dining revenue, while outbound travel declined, the report added.
Daily stock turnover tumbled 14.52 percent last quarter from a year earlier, when global capital moved from emerging to advanced markets in pursuit of higher yields, it said.
The government lent support by providing subsidies for domestic travel and purchases of energy-efficient home appliances, it said, adding that the government is to spend more on infrastructure.
Government expenditure increased 3.55 percent last quarter and played an important role in the 9.32 percent gain in capital formation, it said.
The DGBAS is to update its growth forecast next month.
The GDP reading last quarter could drag the value for last year to 2.6 percent, from the 2.66 percent predicted in November, the agency said.
It said it expects economic growth to slow to 2.41 percent this year, but the forecast could be subject to a downward revision amid growing headwinds.
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