Taiwan Q2 Economic Growth Revised Down; Govt Cuts Forecast

(RTTNews) - Taiwan's economy grew slower than initially estimated in the second quarter and the government forecast slower growth for the year, a report from the Directorate General of Budget, Accounting & Statistics showed Friday.

Gross domestic product grew 0.52 percent in the second quarter from last year, revised from 0.64 percent increase reported on July 31. The growth rate for the first quarter was revised to 3.84 percent from 3.37 percent. Economists had expected the growth rate to ease to 0.60 percent.

This was the slowest since the second quarter in 2012 when GDP rose 0.42 percent.

On the expenditure side, the real private final consumption grew 2.85 percent annually in the second quarter and real government final consumption rose by 0.05 percent. Gross capital formation increased by 1.33 percent.

Exports of goods and services dropped 8.32 percent in the second quarter and imports plunged 12.56 percent.

"Taiwan's export plummeted due to the sluggish demand in global consuming electronic products, the crowding out effects from the expanded supply chain in Mainland China and the falling prices of crude oil," the government said.

Quarter-on-quarter on an annualized basis, GDP fell 6.56 percent in the second quarter, revised from a 7.65 percent drop estimated earlier. The growth rate for the first quarter was revised to 2.30 percent from 2.74 percent.

The government cut its GDP growth forecast for this year to 1.56 percent from 3.28 percent previously prediction in May, due to weak exports of goods and services. Consumer prices is now expected to decline by 0.19 percent for 2015, compared to the previous estimate of 0.13 percent growth.

Real GDP is now projected to rise by 0.10 percent year-on-year in the third quarter and by 1.90 percent in the fourth quarter of 2015.

The government said the world economy is expected to have a better performance in 2016, which would sustain Taiwan's export growth. For 2016, Taiwan's real GDP is projected to grow by 2.70 percent and consumer prices is predicted to rise by 0.74 percent.