Taiwan: Weak economic growth in Q1 confirmed
May 26, 2012
In the first quarter, GDP rose 0.4% over the same period last year, according to data released by the statistical institute on 25 May. The reading confirmed an advance estimate released on 30 April and came in below the 1.9% expansion recorded in the fourth quarter. The deceleration was entirely driven by a deterioration in the external sector, which offset an improvement in domestic demand. Private consumption accelerated from a 1.1% annual expansion in the fourth quarter to a 1.7% increase in the first, while gross fixed investment improved somewhat from a 12.8% contraction in the final quarter of 2011 to a 10.5% decline. In contrast, the external sector's net contribution to overall growth dropped from 5.0 percentage points in Q4 2011 to 1.6 percentage points in the first quarter, as exports of goods and services contracted 3.3% (Q4 2011: +0.9% year-on-year), while imports improved slightly from a 7.4% contraction in the fourth quarter to a 6.8% decline in the first. Seasonally adjusted data do not corroborate the deterioration suggested by the annual figures, as GDP expanded 0.70% over the previous period, which contrasted the 0.53% decline observed in Q4 2011. The government recently downgraded its economic outlook and now sees GDP expanding 3.0% this year, down from a previous 3.4% projection.