Taiwan’s economy expanded a mild 1.54 percent last quarter from a year earlier, thanks to government spending and private investment, as the COVID-19 pandemic affected consumer activity, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The growth rate missed the agency’s forecast in February by 0.26 percentage points and was the lowest in 15 quarters, as Taiwan was not spared the impact of the pandemic, which has infected 3.2 million people globally and killed more than 228,000.
“The coronavirus has hurt the economy harder than expected after spreading across Europe and the US,” National Income Section head Yu Ming-chun (游敏君) said.
Photo: Tyrone Siu, Reuters
Asked about forecasts for full-year growth, Yu said the agency would give an update later this month.
The seasonally adjusted annual rate shrank 5.91 percent, suggesting heightened risks of a technical recession if the gauge stays in negative territory for two straight quarters.
The quarterly report indicated that government expenditure increased 3.67 percent annually during the January-to-March period, contributing 0.48 percentage points to GDP growth in the first quarter, while capital formation rose 3.13 percent, adding 0.73 percentage points to GDP.
The “mild outbreak” in Taiwan allowed local manufacturers to maintain normal operations and win order transfers from foreign peers that were hit by temporary shutdowns, the report said.
That helped support a 3.67 percent increase in exports and a 3.13 gain in imports in the quarter, adding 0.86 percentage points to net external demand, beating expectations, Yu said.
Major technology companies are ramping up production to meet demand for next-generation consumer electronics, but non-tech companies are struggling amid a crude oil price rout, the DGBAS said.
Service-focused firms bore the brunt of the coronavirus outbreak, as people stayed home to avoid infections, it said.
Private consumption dropped 0.97 percent, contrary to a projected 0.75 percent increase, despite an 8.18 percent pickup in new vehicle sales and a 16.52 percent jump in e-commerce sales, the report said.
Social distancing and travel restrictions wreaked havoc on restaurants, hotels and tourism-related sectors.
Listed hospitality providers saw revenue tumble 26.21 percent in the first quarter, while restaurant sales weakened 6.59 percent from a year earlier, the report said, adding that outbound tourist visits plunged 49.17 percent year-on-year.
DGBAS Minister Chu Tzer-ming (朱澤民) has said the economy would expand this year, backed by NT$1.05 trillion (US$35.23 billion) in government relief and stimulus measures, contributing more than 5 percent to GDP.
International research institutes have forecast a small recession for Taiwan, partly due to global lockdown measures that would diminish trade flows.
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