Taiwan’s economy expanded a mild 1.54 percent last quarter from a year earlier, thanks to government spending and private investment, as the COVID-19 pandemic affected consumer activity, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The growth rate missed the agency’s forecast in February by 0.26 percentage points and was the lowest in 15 quarters, as Taiwan was not spared the impact of the pandemic, which has infected 3.2 million people globally and killed more than 228,000.
“The coronavirus has hurt the economy harder than expected after spreading across Europe and the US,” National Income Section head Yu Ming-chun (游敏君) said.
Photo: Tyrone Siu, Reuters
Asked about forecasts for full-year growth, Yu said the agency would give an update later this month.
The seasonally adjusted annual rate shrank 5.91 percent, suggesting heightened risks of a technical recession if the gauge stays in negative territory for two straight quarters.
The quarterly report indicated that government expenditure increased 3.67 percent annually during the January-to-March period, contributing 0.48 percentage points to GDP growth in the first quarter, while capital formation rose 3.13 percent, adding 0.73 percentage points to GDP.
The “mild outbreak” in Taiwan allowed local manufacturers to maintain normal operations and win order transfers from foreign peers that were hit by temporary shutdowns, the report said.
That helped support a 3.67 percent increase in exports and a 3.13 gain in imports in the quarter, adding 0.86 percentage points to net external demand, beating expectations, Yu said.
Major technology companies are ramping up production to meet demand for next-generation consumer electronics, but non-tech companies are struggling amid a crude oil price rout, the DGBAS said.
Service-focused firms bore the brunt of the coronavirus outbreak, as people stayed home to avoid infections, it said.
Private consumption dropped 0.97 percent, contrary to a projected 0.75 percent increase, despite an 8.18 percent pickup in new vehicle sales and a 16.52 percent jump in e-commerce sales, the report said.
Social distancing and travel restrictions wreaked havoc on restaurants, hotels and tourism-related sectors.
Listed hospitality providers saw revenue tumble 26.21 percent in the first quarter, while restaurant sales weakened 6.59 percent from a year earlier, the report said, adding that outbound tourist visits plunged 49.17 percent year-on-year.
DGBAS Minister Chu Tzer-ming (朱澤民) has said the economy would expand this year, backed by NT$1.05 trillion (US$35.23 billion) in government relief and stimulus measures, contributing more than 5 percent to GDP.
International research institutes have forecast a small recession for Taiwan, partly due to global lockdown measures that would diminish trade flows.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his