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
Economy contracts unexpectedly in Q2
August 24, 2012
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Taiwan GDP Chart
Note: Year-on-year changes of GDP in %.
Source: Directorate-General of Budget, Accounting and Statistics and FocusEconomics Consensus Forecast.
Taiwan Economic News
October 9, 2016
In September, the trade surplus totaled USD 4.4 billion, according to data from the Ministry of Finance.
October 5, 2016
In September, consumer prices increased 0.45% over the previous month, which was a rebound from the 0.03% fall recorded in August.
October 3, 2016
Taiwanese manufacturers registered better business conditions for the fourth consecutive month in September.
September 29, 2016
At its quarterly monetary policy meeting on 29 September, the Central Bank of the Republic of China (Taiwan) decided to leave the discount rate unchanged at 1.375%, which was a decision that markets had expected, although some analysts had foreseen a further reduction to the key policy rate. The Central Bank has cut the main monetary policy rate four times since September 2015 by a total of 50 basis points and this time the authority decided to leave interest rates unchanged “against a back drop of moderate global growth and renewed momentum for the domestic economy, along with a mild inflation outlook for next year.” Regarding global developments and how they affect the Taiwanese economy, the Central Bank stated that the global economy continues to decelerate as a result of slower economic growth in the U.S., a still tepid recovery in the Eurozone economy and sluggish economic activity in Japan.
September 27, 2016
Taiwan’s industrial output increased substantially in August, backed by a base effect but also due to strong growth in semiconductor manufacturers’ output, which benefited from the debut of Apple’s latest iPhone model.