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Taiwan's quarterly GDP decreases, lowest since 2009

Xinhua, October 30, 2015 Adjust font size:

Taiwan's gross domestic product (GDP) shrank by 1.01 percent year on year, which went against an earlier forecast of 0.1-percent growth, the island's statistics agency announced on Friday.

The rate has been the lowest since the second quarter of 2009, when Taiwan was affected by the global financial crisis.

The main cause of reduction was weakening demand in international and local markets, the agency said in a press release.

Real exports of goods and services contracted by 2.85 percent year on year after inflationary adjustments, while the imports fell 1.47 percent.

Local consumption was also affected. Private consumption only grew 0.89 percent year on year, compared with 2.81 percent in the second quarter. The slower growth was attributed to revenue reduction of retailing and less spending from tourists on the island. But, thanks to the depreciation of yen and euro, the number of outbound tourists increased and led to more travel spending.

Public and private investment also dropped 1.25 percent from a year earlier.

Output for the manufacturing sector decreased by 3.1 percent, mainly due to a fall in output of computers, electronic and optical products as well as overcapacity of electronic parts and steel. Several other major growth contributors, including retail, power and financial sectors, reported revenue reduction.

Taiwan's economy grew 3.84 percent in the first quarter and 0.52 percent in the second quarter.

The annual GDP growth target was set at 1.56 percent but analysts suggest that it may struggle to even meet the 1-percent target.

Kao Shien-quey, deputy head of Taiwan's development council, told media that the local economy bottomed out in the third quarter and was confident the fundamentals would bounce back in the fourth quarter with expectant private consumption growth.

To address the current plight, the island' s authorities on Friday announced a package of short-term stimulus policies, including subsidies for the purchase of energy-efficient home appliances, for travel and for residents who replace their outdated cell phones with smartphones. Endi