Compared to 2008, Taiwan's economy is expected to contract 3.6% in 2009,. due to weak demand at home and abroad, an economic think tank said April 17.
In a report, Chung-Hua Institution for Economic Research said the island's economy is expected to extend its weakness into this year as the global economic crisis continues to cast a shadow. The think tank's prediction is more severe than the government's February forecast that the domestic economy would contract 2.97% in 2009.
The research institution said that while cross-strait business exchanges are on the rise amid warming Taiwan and China ties, the benefits need time to be realized.
Taiwan's GDP is expected to fall 9.1% in the first quarter and decline 6.61% in the second quarter, with domestic investment down 29.5%, the institution said.
However, the island's economy is expected to improve slightly in the second half of this year.
The economy is expected to contract 2.4% in the third quarter but grow 4.1% in the fourth quarter.
An 8.4% contraction in the fourth quarter last year marked the biggest slump since 1961, when the government started compiling quarterly figures.
Copyright Agence France-Presse, 2009
