The Taiwanese economy shrank more than expected in the first quarter, suggesting tighter links to a slowing China remain a drag on growth for the export-dependent nation

The Taiwanese economy shrank more than expected in the first quarter, suggesting tighter links to a slowing China remain a drag on growth for the export-dependent nation

Taiwanese GDP contracted by 0.84 per cent from a year earlier in the March quarter, accelerating from contraction of 0.52 per cent at the end of 2015 and exceeding expectations of a 0.65 per cent contraction among economists surveyed

The latest growth report is the worst since a contraction of 0.98 per cent in the third quarter of 2009, the most recent contraction before the economy shrank by 0.80 per cent in the quarter ended September last year

Taiwan’s central bank trimmed its benchmark rate to 1.5 per cent in March after cutting rates twice last year in September and December

Figures from the National Statistics Office in Taipei showed manufacturing activity had pared losses to -4.1 per cent in the first quarter year on year, easing from -4.74 per cent the previous quarter. Taiwan’s purchasing manufacturers index in March rose to 51.7 from a February reading of 50, though prices continued to fall as firms sought to line up more work

But the contraction in construction accelerated by 3.15 percentage points to -4.65 per cent, with wholesale/retail and transportation/storage activity both slipping further into negative territory

While electricity/gas activity had clawed its way back from a fall of 11.78 per cent last quarter to eke out growth of 0.01 per cent year on year, the only area to show any substantial growth was real estate, which rose by about a percentage point to 1.38 per cent