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.
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
‘DRAMATIC AND POSITIVE’: AI growth would be better than it previously forecast and would stay robust even if the Chinese market became inaccessible for customers, it said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its full-year revenue growth outlook after posting record profit for last quarter, despite growing market concern about an artificial intelligence (AI) bubble. The company said it expects revenue to expand about 35 percent year-on-year, driven mainly by faster-than-expected demand for leading-edge chips for AI applications. The world’s biggest contract chipmaker in July projected that revenue this year would expand about 30 percent in US dollar terms. The company also slightly hiked its capital expenditure for this year to US$40 billion to US$42 billion, compared with US$38 billion to US$42 billion it set previously. “AI demand actually
RSS