Taiwan: Economy dips in Q3 and records biggest contraction since Q3 2009
October 30, 2015
In the third quarter of 2015, GDP dropped 1.0% over the same period of the previous year, according to preliminary data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on 30 October. The reading undershot market expectations of a 0.1% expansion and was below Q2’s 0.5% growth. The reading marked the biggest contraction since the third quarter of 2009.
Q3’s downturn came on the back of a worse performance in domestic demand, while the external sector’s drag on growth moderated. Private consumption dropped from a 2.9% year-on-year expansion in Q2 to a meager 0.9% increase in Q3. Government consumption swung from a 0.1% expansion in the second quarter to a 0.6% contraction in the third. In addition, gross capital formation dropped sharply, swinging from a 5.5% expansion in Q2 to a 1.3% drop.
On the external front, exports of goods and services continued deteriorating, contracting 2.9% in Q3. The result followed Q2’s 1.3% contraction and is the worst result since Q2 2012. In addition, imports dropped noticeably and swung to a 1.5% contraction (Q2: +2.2% year-on-year). As a result, the external sector’s net contribution to overall economic growth improved from minus 2.2 percentage points to 1.1 percentage points.
On a sequential basis, GDP rose 0.1% over the previous period in seasonally-adjusted terms, which contrasted the 1.7% increase observed in the second quarter of the year.