Taiwan Q2 GDP returns to growth, pulling out of recession from Q1

A night view of the city as seen from Taipei 101 observatory in Taipei, Taiwan, Jan 17, 2023. REUTERS/Ann Wang/File photo

TAIPEI   – Taiwan’s export-dependent economy returned to growth in the second quarter, helped by resilient domestic consumption, while exports remained weak as a result of flagging demand for the island’s technology products amid global economic challenges.

Gross domestic product (GDP) expanded by a preliminary 1.45 percent in the April-June period versus a year earlier, the statistics agency said on Friday, beating the 0.8 percent growth forecast in a Reuters poll.

Quarter-on-quarter, the economy expanded at a seasonally adjusted annual rate of 7.02 percent.

GDP in the first quarter had fallen 2.87 percent from a year earlier, with the economy slipping into recession.

READ: Taiwan slips into recession as Q1 GDP contracts worse than expected

Taiwan’s exports fell more than expected in June, slumping the most in nearly 14 years, with the government predicting that a return to growth may not occur until November.

Second-quarter exports dropped 16.9 percent compared with the same period last year, an improvement on the first quarter’s annual contraction of 19.2 percent.

The government said in May it expects full-year 2023 growth of 2.04 percent, the slowest pace in nearly eight years and lower than 2.45 percent growth in 2022.

The economy in China, Taiwan’s largest export market, grew 6.3 percent in the second quarter, coming in under analyst forecasts, as demand weakened at home and abroad, with post-COVID momentum faltering rapidly.

READ: Taiwan cuts GDP forecast, export outlook as global demand weakens

Taiwan is a key hub in the global technology supply chain for companies such as Apple Inc, and home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

The statistics agency will provide revised figures a few weeks later, with more details and forward-looking forecasts.