Taiwan’s economy shrank for a second consecutive quarter at the beginning of 2023, which is the biggest drop in quarterly GDP since the 2009 global financial crisis. The Directorate-General of Budget, Accounting and Statistics released preliminary figures, indicating that gross domestic product for the first quarter was down by 3.02 percent on a year-on-year basis. The statistics bureau has lowered its estimate for Taiwan’s GDP growth in 2023 from 2.75 percent to 2.12 percent.
The statistics bureau has attributed the drop in GDP to weak global demand and inventory adjustments that caused a 10.86 percent decrease in real exports of goods and services. Taiwan’s imports also fell by 4.17 percent. These figures represent the second consecutive quarterly contraction after a decline was reported in the last quarter of 2022, which was the first drop since the beginning of 2016.
The pandemic situation in China, Taiwan’s largest trade partner, caused a slowdown in the economy last year. Taiwan’s economy is one of the most important economies in the world due to its role in producing high-tech equipment, particularly state-of-the-art semiconductors. The semiconductor industry has been hit by an ongoing economic slowdown that has dampened demand, as well as US export controls aimed at preventing China from obtaining advanced chips.
Taiwan Semiconductor Manufacturing Company, the world’s largest chip maker, warned this month that its second-quarter performance would be impacted by slowing consumer demand before business picks up later in the year.
