The Taiwanese economy is expected to have shrunk for the third consecutive time in Q1 2016, according to DBS Bank. The economy is likely to have contracted 0.6% in the first quarter, as compared with the contraction of 0.5% in Q4 2015, added DBS Bank. On quarter-on-quarter saar basis, the Taiwanese economy is likely to have remained at a subpar level of 2%, almost similar to that in Q4 2015.
The first quarter economic growth is expected to be majorly weighed on by additional drop in exports. However, growth in consumption might have recovered to improve some of the slack, noted DBS Bank. Consumer financing activities have been increased by the help of central bank’s rate cuts and alleviation of housing loan rules.
Meanwhile, household equipment and consumer electronics’ sales have increased due to a subsidy program implemented by the government since late 2015. The official forecast made during the beginning of 2016 called for a slight contraction of economic growth in the first quarter of this year. According to Taiwan’s statistics agency, the economy will expand 1.47% in the whole of 2016.
This signals that the growth rate on year-on-year terms will be positive in the second quarter and expand to an average of 2.7% in Q3 2016-Q4 2016. However, currently, risks are tilted on the downside, noted DBS Bank.
The material has been provided by InstaForex Company – www.instaforex.com