Taiwan’s trade-dependent economic system unexpectedly contracted within the fourth quarter, reflecting its worst efficiency in 13 years, hit by a drop in exports on slowing world tech demand and COVID-related chaos in its largest market China.
For the October-December interval, annual gross home product (GDP) contracted by 0.86% from the identical interval a yr earlier, in contrast with 4.01% development for the earlier quarter, revealed preliminary knowledge from the statistics company confirmed on Wednesday.
That was worse than a rise of 1.3% forecast in a Reuters ballot, and the worst quarterly efficiency because the economic system contracted 1.13% within the third quarter of 2009, when the world was coping with a monetary disaster.
Compared with the earlier quarter, Taiwan’s economic system contracted 4.24% at a seasonally adjusted annual price.
“External demand has weakened significantly,” stated the Directorate General of Budget, Accounting and Statistics, pointing to world inflation and rising rate of interest suppressing demand, and “the deterioration of the pandemic in mainland China interfering with consumption and production activities”.
For all of 2022, the economic system expanded a preliminary 2.43%, in comparison with 6.53% logged for 2021. That was barely slower than final yr’s 3% development recorded in China, which was hit exhausting by stringent COVID-19 curbs and a property market hunch.
Taiwan’s complete fourth-quarter exports dropped 8.63% from a yr earlier by way of U.S. Dollars, the company stated.
As a key hub within the world expertise provide chain for giants corresponding to Apple Inc, Taiwan’s economic system had outperformed many regional friends in the course of the pandemic because it benefited from strong demand for tech exports as extra individuals turned to working and learning from residence.
But world financial woes pushed by hovering inflation and the impression of the struggle in Ukraine, in addition to China’s pandemic scenario, has impacted demand for made-in-Taiwan items.
Taiwan will launch revised GDP figures at a later – but to be set – date, together with full-year development forecasts for 2023. In November, the statistics company revised down its full yr 2023 outlook to 2.75% from a earlier forecast of three.05%.
