Taiwan narrowly avoids recession as exports slump to mainland China's slowing economy

Taiwan narrowly dodged a recession in the third quarter even as the economy contracted for the first time since the global financial crisis, with exporters suffering a crippling blow from faltering global demand and a slowdown in mainland China.

The worse-than-expected 1.01 per cent slump in July-September gross domestic product was the first year-on-year contraction in six years and prompted the government to announce a NT$4.08 billion (HK$967 million) stimulus package to boost domestic consumption over the short term.

High-tech manufacturers in Taiwan’s trade-reliant economy have been hurt by faltering demand in regional powerhouse mainland China, along with other exporters from Singapore to Japan to Brazil.

"”The biggest drag is exports due to the softening of China. That won’t dissipate anytime soon and probably will drag on growth in the fourth quarter,” said Emily Dabbs, economist with Moody’s Analytics in Sydney.

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Premier Mao Chi-kuo told a news briefing after the release of Friday’s preliminary GDP figures that Taiwan’s outlook would depend on how conditions evolve overseas, a tacit admission that policymakers have few answers to depressed global demand.