Taiwan’s gross domestic product contracted at an annual rate of 0.52% in the fourth quarter of 2015—steeper than the previous estimate of 0.28%—as the country’s export-led economy reeled under slowing demand from China. The data marks the second consecutive quarter of contraction in the Taiwanese economy—the definition of a technical recession—after a drop of 0.8% in the July to September quarter.
For the whole of 2015, the growth rate was pegged at a tepid 0.75%—the country’s slowest annual growth in at least six years, IBTimes reported.
Furthermore, the government also cut the GDP growth forecast for 2016 to a 1.47% expansion from an earlier projection of 2.32%.
Taiwanese economy has been battered by slowing growth in China—its biggest market that accounts for a quarter of its exports. Data released Monday showed that Taiwan’s exports in January slid for the 12th straight month, dropping 13%, to $22.2 billion from $25.5 billion a year earlier.
Exports to China and Hong Kong, which cumulatively account for over 38% of Taiwan’s exports, plunged 19.3% in January from the previous year to $8.6 billion.
“Demand from international markets was weak, orders from semiconductor industry clients were conservative, and oil and steel prices kept hovering at low levels,” Taiwan’s finance ministry said.
“Looking ahead, the global economic outlook is opaque—competition is getting stiffer, raw industrial and agricultural material prices are on the decline. Also weighing down Taiwan’s export outlook is mainland China’s supply glut and the push to develop its own supply chains.”
On Tuesday, Taiwan’s government also trimmed the forecast for exports in 2016, underscoring concerns that weakness in the country’s economy may persist in the first half of this year. Exports are now expected to decline 2.78%, rather than increase 1.97% as previously estimated.
