TAIPEI: Taiwan’s trade-dependent economy is likely to grow more slowly this year than previously forecast, hit by a slump in exports on weakening external demand due to global inflation, rate rises and impact of the war in Ukraine, the government said.

Taiwan, home to major tech companies including the world’s largest contract chip maker TSMC, has seen exports contract for five months in a row as consumers tighten ther purse strings around the world, while China, Taiwan’s largest export market, has yet to bounce back from COVID-19-related turmoil.

Taiwan’s gross domestic product (GDP) for 2023 is now expected to be 2.12% higher than last year, the Directorate General of Budget, Accounting and Statistics said on Wednesday, revising down the 2.75% forecast it issued in November.

That would mark a slowdown from the 2.45% logged for 2022, which was itself far slower than 2021’s 6.53% expansion.

“Under the influence of monetary tightening by various countries to combat inflation and the stalemate in the Russia-Ukraine war, terminal consumer demand has weakened, product prices have fallen, industrial supply chain inventories have been adjusted, and global economic growth has slowed,” the statistics agency said.