Taiwan’s economy last quarter contracted 0.86 percent, missing the government’s forecast of growth of 1.52 percent, as a global economic slowdown wreaked havoc on exports, preliminary figures released yesterday by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed.
The disappointing results put an end to 26 straight quarters of growth after exports tumbled 8.6 percent, the worst retreat since the global financial crisis in 2008, as inflation and monetary tightening around the world, as well as rising COVID-19 infections in China, chilled demand for tech and non-tech products, DGBAS statistics division head Wu Pei-hsuan (吳佩璇) said.
The predicament might persist this and next quarter as companies cut production to cope with sluggish demand and digest excess inventory, Wu told an online news conference.
Photo: CNA
On a seasonally adjusted annual basis, GDP last quarter fell 4.24 percent, DGBAS data showed.
Poor external demand weighed on the economy by 2.59 percentage points, more than offsetting a 2.04 percent increase in domestic demand, Wu said.
Shipments to China slumped 15.6 percent, as Beijing’s “zero COVID-19” policy smothered economic activity for most of last year, the official said.
It remains to be seen how the world economy would pan out after China’s abrupt opening last month, Wu said.
Taiwan’s trade with other destinations also took a hit. Exports to the US fell 3.8 percent, while those to Europe dropped 9.3 percent and shipments to ASEAN markets shrank 1.7 percent, the agency said.
Private consumption fared stronger with a 2.89 percent expansion, as service providers saw robust business amid loosened COVID-19 restrictions and Taiwan’s opening, Wu said, adding that the government lent support by increasing spending.
Capital formation was virtually neutral, edging up 0.03 percent after local firms bought more capital equipment, but trimmed inventory, Wu said.
The fourth-quarter results slowed overall GDP growth for the whole of last year to 2.43 percent, the lowest since 2016 and below the 3.06 percent gain the statistics agency forecast in November.
“Economic headwinds abroad turned out much worse than expected,” Wu said, adding that economic challenges loom larger ahead.
The agency in November forecast that exports would continue to contract in the following six months.
Wu said it would provide a more detailed update next month.
Global GDP growth is likely to fall, which would be unfavorable to Taiwan’s export-reliant economy, the National Development Council said.
The government would increase its expenditure this year, and has introduced special budgets to support affected sectors and people, the council said.
The combined effect of the monsoon, the outer rim of Typhoon Fengshen and a low-pressure system is expected to bring significant rainfall this week to various parts of the nation, the Central Weather Administration (CWA) said. The heaviest rain is expected to occur today and tomorrow, with torrential rain expected in Keelung’s north coast, Yilan and the mountainous regions of Taipei and New Taipei City, the CWA said. Rivers could rise rapidly, and residents should stay away from riverbanks and avoid going to the mountains or engaging in water activities, it said. Scattered showers are expected today in central and
COOPERATION: Taiwan is aligning closely with US strategic objectives on various matters, including China’s rare earths restrictions, the Ministry of Foreign Affairs said Taiwan could deal with China’s tightened export controls on rare earth metals by turning to “urban mining,” a researcher said yesterday. Rare earth metals, which are used in semiconductors and other electronic components, could be recovered from industrial or electronic waste to reduce reliance on imports, National Cheng Kung University Department of Resources Engineering professor Lee Cheng-han (李政翰) said. Despite their name, rare earth elements are not actually rare — their abundance in the Earth’s crust is relatively high, but they are dispersed, making extraction and refining energy-intensive and environmentally damaging, he said, adding that many countries have opted to
People can preregister to receive their NT$10,000 (US$325) cash distributed from the central government on Nov. 5 after President William Lai (賴清德) yesterday signed the Special Budget for Strengthening Economic, Social and National Security Resilience, the Executive Yuan told a news conference last night. The special budget, passed by the Legislative Yuan on Friday last week with a cash handout budget of NT$236 billion, was officially submitted to the Executive Yuan and the Presidential Office yesterday afternoon. People can register through the official Web site at https://10000.gov.tw to have the funds deposited into their bank accounts, withdraw the funds at automated teller
CONCESSION: A Shin Kong official said that the firm was ‘willing to contribute’ to the nation, as the move would enable Nvidia Crop to build its headquarters in Taiwan Shin Kong Life Insurance Co (新光人壽) yesterday said it would relinquish land-use rights, or known as surface rights, for two plots in Taipei’s Beitou District (北投), paving the way for Nvidia Corp to expand its office footprint in Taiwan. The insurer said it made the decision “in the interest of the nation’s greater good” and would not seek compensation from taxpayers for potential future losses, calling the move a gesture to resolve a months-long impasse among the insurer, the Taipei City Government and the US chip giant. “The decision was made on the condition that the Taipei City Government reimburses the related
RSS