Taiwan said on August 20 that the economy shrank a better-than-expected 7.54% in the second quarter as exports improved, and that post-Typhoon Morakot reconstruction could help its full-year outlook.
The data followed a record 10.13% dive in the first quarter, according to revised figures released by the Directorate General of Budget, Accounting and Statistics.
"Taiwan's GDP (gross domestic product) hit a bottom in the first quarter from the impact of the global financial tsunami... (and) the recession in the second quarter obviously eased," it said. The second quarter figure marked the fourth consecutive fall in GDP.
A recovery in the exports as well as an increase in domestic consumption due to tax incentives helped ease the shrinkage, the bureau said.
It also revised its full-year forecast for the island upward to a contraction of 4.04% from a previous estimate of a 4.25% decline. The new figure reflected improving exports while making adjustments to account for the possible impact of the deadly Typhoon Morakot on GDP in the third quarter.
The agency said private sector consumption would decline by up to 19 billion Taiwan dollars.
Shih Su-mei, the minister in charge of the budgeting body, said if the typhoon had not hit, GDP would contracted by 3.8% in the third quarter. However, she also presented a second full-year forecast based on the positive impact spending on typhoon reconstruction projects could have. "The GDP for the full year would contract 3.75% if the positive effects from the various typhoon reconstruction projects are taken into consideration," she said.
The budgeting body forecast that GDP would grow 3.92% in 2010, with the consumer price index rising 0.87%
Taiwan's July exports fell 24.4% year-on-year, the smallest decline in eight months as demand for electronics picked up, according to the finance ministry.
Copyright Agence France-Presse, 2009