LEAD: Taiwan GDP growth slows to 1.9 per cent

Jan 31, 2012, 10:17 GMT

Taipei - Taiwan's economic growth slowed in the fourth quarter to 1.9 per cent year-on-year on a large drop-off in exports, the government said Tuesday.

The overall gross domestic product (GDP) growth rate for 2011 stood at 4.03 per cent, which is 0.48 percentage points lower than the government had forecast.

When compared to the third quarter, the economy actually contracted by 0.25 per cent.

The statistics agency blamed sluggish demand, especially due to the eurozone debt crisis, as the reason for the slowdown in growth. Taiwan relies on exports for much of its economic growth, but exports lost significant momentum as the year progressed.

December export orders, an indicator of future outbound goods, fell for the first time since October 2009, dropping 0.72 per cent from a year earlier.

The growth rate for exports dropped from 11.20 per cent in the first quarter of 2011 to 0.43 per cent in the fourth quarter.

Private investment also saw a 19.24-per-cent drop in the fourth quarter as exporters cut back on capital investment because of the gloomy outlook.

Taiwan's economic affairs minister Shih Yen-shiang predicted Monday that the downturn would bottom out in Taiwan by the end of the first quarter of this year.

The government has revised its forecast for 2012 downwards to a growth rate of 3.91 per cent.