Taiwan GDP


Economy contracts unexpectedly in Q2

In the second quarter, GDP declined 0.2% over the same period last year, according to data released by the statistical institute on 17 August. The reading contrasted both the 0.4% expansion observed in the first quarter as well as market expectations, which had anticipated the economy would expand 0.4%. The quarterly contraction was mainly driven by a decline in gross fixed investment, which fell 5.2% year-on-year (Q1: -10.2% yoy). In addition, private consumption expanded a meagre 0.8% over the same quarter last year, nearly half of the 1.4% increase recorded in Q1. On the external side of the economy, both exports and imports eased the pace of contraction compared with the previous quarter. Exports of goods and services declined 2.0% (Q1: -3.3% yoy), while imports fell 3.7% over the same quarter a year ago (Q1: -6.9% yoy). As a result, the net contribution from the external sector to overall growth deteriorated from +1.6 percentage points in the first quarter to +0.6 percentage points in the second. Seasonally adjusted data, however, do not corroborate the contraction suggested by the annual figures, as GDP expanded 0.85% over the previous period, which followed the 0.38% increase recorded in Q1. The government recently downgraded its economic outlook and now sees GDP expanding 1.7% this year, down from a previous 3.0% projection


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Taiwan GDP Chart

Taiwan GDP Q2 2012

Note: Year-on-year changes of GDP in %.
Source: Directorate-General of Budget, Accounting and Statistics and FocusEconomics Consensus Forecast.

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