Taiwan disappoints with slowing growth rate
Taiwan's economy expanded at a slower pace than economists estimated in the first quarter as a faltering global recovery hurt exports, increasing pressure on the central bank to extend an interest-rate pause to aid growth.
Gross domestic product rose 1.54 per cent in the three months to March from a year earlier, after increasing 3.72 per cent in the fourth quarter of last year, the statistics bureau said in a preliminary report yesterday.
The gain was less than all estimates in a survey of 17 economists, where the median was 3.1 per cent.
The island's growth slowdown adds to signs of a cooling global economy after mainland China and the United States expanded less than analysts estimated last quarter.
Taiwan's export orders and industrial output unexpectedly dropped in March, while Japanese and South Korean production missed forecasts as faltering demand limited Asia's recovery.
"Taiwan's GDP is a reflection of a sluggish global recovery and the decline of global demand, notably from China," said Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group.
The data suggested the monetary policy stance would be maintained, "unless there is a significant contraction of the regional economies from unforeseeable risks, including avian flu".
Taiwan last week confirmed an H7N9 bird flu infection in a traveller returning to the island from the mainland, the first incidence of the killer virus spreading outside the mainland.
President Ma Ying-jeou has sought closer trade and investment ties with the mainland to bolster the island's economy. Taiwan this month said it would let mainland lenders own as much as 20 per cent of some financial institutions.
Export orders, an indication of shipments in the next one to three months, fell for a second straight month in March. Overseas sales are equivalent to about two-thirds of the economy. The statistics bureau in February raised its forecast for GDP growth this year to 3.59 per cent, and said inflation might average 1.37 per cent, with exports growth of 6.23 per cent.