The global recession has caused a sharp decrease in demand for products worldwide. Big manufacturers like China and Japan have all revised this year’s growth forecasts. Despite the depression taking place mainly in Europe, large and small asian countries alike have felt the macroeconomic impact of the sovereign debt crisis. BBC News reports on Taiwans current contraction and the revisions made to their prospective growth:
Taiwan’s economy contracted in the three months to the end of June, as the global slowdown weighed on export-dependent countries.
The economy contracted 0.16% compared with the previous year, the statistics agency said. Analysts were expecting slight growth.
The agency also cut its forecast for full year growth to 2.08% down from 3.03%.
Asian countries are reeling from a drop in demand from a key market, Europe.
“Given how weak Western markets remain, Beijing’s loosening must start to lift mainland demand soon if Taiwan is to achieve a meaningful recovery in second half of 2012,” said Donna Kwok from HSBC.
The government in Beijing has started taking steps to spur lending by cutting key interest rates and fast-tracking investment projects.