Taiwan slips into recession as GDP shrinks for third straight quarter

Taiwan contracted 0.84% in Q1 this year, after shrinking 0.8% and 0.52% in the third and fourth quarters of last year.

The Taiwanese economy shrank more than expected in the first quarter this year, making its third straight quarter of contraction, sending share prices down on Friday.

Friday's (29 April) data showed the gross domestic product of Taiwan declined 0.84% in the three months to March when analysts had been expecting a contraction of 0.6%.

It comes after the 0.8% contraction in the third quarter of 2015 and 0.52% decline in the fourth quarter.

The Q1-2016 figure is the worst since Q3-2009 when the export-oriented Taiwanese economy shrank 0.98%.

The Taiwanese stock index TAIEX was down more than 1.1% at 10:45 am in Singapore.

Experts suggested only a revival in the Chinese economy can propel growth in Taiwan in the near term.

Gareth Leather and Daniel Martin, senior Asia economists at Capital Economics, suggested the best hope for a recovery might lie in an export rebound:

"Signs of improvement in China bode well for Taiwan, and we are hopeful that a recovery in China will provide a boost to Taiwan's exports this year," said Gareth Leather and Daniel Martin, senior Asia economists at Capital Economics, according to Financial Times report.

"However, with growth in the developed world likely to disappoint once again, a strong rebound looks unlikely," the analysts added.

The Central Bank of China (Taiwan) slashed key policy rates by 12.5 basis points on 24 March and highlighted decelerating growth and mild inflation. The benchmark discount rate now stands at 1.5%.