Taiwan First Quarter Growth Well Below Forecast

Taipei, Taiwan
Jeremy Woodhouse | Digital Vision | Getty Images
Taipei, Taiwan

Taiwan's economy grew by a well-below-forecast preliminary 1.54 percent year-on-year in the first quarter of 2013, the statistics agency said on Tuesday, pointing to a slow recovery for the global economy.

The disappointing figure comes as export growth was slower than expected and domestic consumption was weak, the agency said, adding that demand from Europe and China, Taiwan's biggest export destination, was soft.

(Read More: Taiwan Raises 2013 Outlook After Better Than Forecast Q4 Growth)

"We may not see a strong rebound until Q3-Q4, but room for central bank to decrease rates is limited because it's not effective in stimulating demand and there's no inflation pressure. The central bank may lower Taiwan dollar instead," said Andrew Tsai, an economist of KGI Securities.

Mainland China's economic recovery unexpectedly stumbled in the first quarter as the annual rate of growth eased back to 7.7 percent from the 7.9 percent pace set in the final quarter of last year.

(Read More: China's PMI Miss: Is It Downhill From Here?)

Taiwan's export orders unexpectedly contracted 6.6 percent in March from a year earlier, shrinking for the second straight month.

Taiwan's export orders are a leading indicator of demand for Asia's exports and for hi-tech gadgets Such as smartphones, and typically lead actual exports by two to three months.