(Bloomberg) -- Taiwan’s economy climbed out of recession last quarter as consumer spending helped counter the global slump in demand that has weighed on trade for the past year.

Gross domestic product in the April-to-June period grew 1.45% from a year ago, official data showed Friday. That was higher than the median estimate of a 0.8% expansion in a Bloomberg survey of economists. 

It compared to a decline of nearly 3% in the first quarter, which was the fastest contraction since the global financial crisis.

A 12.1% jump in private consumption, the biggest increase since 1990, fueled the better-than-expected expansion, as travel and tourism resumed after Covid, said Wu Pei-hsuan, a senior executive officer at Taiwan’s statistics bureau. The rise in spending outstripped a 6.6% contraction in exports. 

But it’s still hard to say whether consumption is “warm” or “boiling”, Wu warned, as it’s coming off a low base with the same time last year the peak of the pandemic in Taiwan. 

Taiwan and other tech-oriented economies in Asia are searching for a bottoming out of the global downturn in demand for semiconductors and other technology. Taiwan has struggled for the past year with a slump in exports of its chips, a critical export. 

That, along with waning investment, led the central bank in Taipei in June to downgrade its growth forecast for the year to 1.72%.  That would be the slowest rate of growth since 2015.

Bearish Outlook

Academia Sinica, Taiwan’s top government-funded research institute, projects even weaker real economic growth of 1.56% for 2023, according to a new report published Thursday.

While external demand “remains constrained,” Academia Sinica noted the government has deployed policies to spur consumption, such as mortgage and rent subsidies and public-transportation assistance. 

“These measures have increased consumer disposable income,” they wrote. “As borders continue to open, the number of cross-border travelers is expected to rise, further stimulating private consumption.”

Taiwan’s monitoring indicator, which gauges activity across a variety of sectors, meanwhile suggested this week that the economy is still sluggish. 

--With assistance from Samson Ellis.

(Updated with official comments and more detail in the fourth and fifth paragraphs and a chart.)

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