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Taiwan's economy unexpectedly shrank in the second quarter after growth in the first three months of the year as demand deteriorated amid the coronavirus, or Covid-19 pandemic, preliminary figures from the Directorate-General of Budget, Accounting and Statistics showed Friday.

Gross domestic product decreased 0.73 percent year-on-year after a 1.59 percent increase in the first quarter. In May, the DGBAS had forecast 0.50 percent growth for the second quarter. Domestic demand decreased 0.70 percent in the second quarter with private consumption falling 5.13 percent. State spending decreased 0.92 percent. Gross fixed capital formation grew 9.56 percent, thanks to the growth of the investment in construction as well as machinery and equipment. Total exports declined 3.68 percent and imports dropped 4.24 percent. Merchandise exports and imports decreased 2.42 percent and 4.00 percent, respectively. Services trade shrank markedly mainly due to sharp reduction in travel. On a quarter-on-quarter seasonally-adjusted annualized basis, GDP decreased 8.82 percent in the second quarter after a 3.57 percent fall in the first three months of the year.

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