J.P. Morgan Asia Pacific Economic Research Taiwan: 2Q GDP weakened notably, main drag coming from the export sector, especially tech Taiwan's 2Q15 real GDP growth slowed notably to 0.52%oya (compared to the advanced reading of 0.64%), following the upwardly-revised growth at 3.84%oya in 1Q (previously: 3.37%). The Directorate General of Budget, Accounting and Statistics (DGBAS) estimates that, seasonally- adjusted, real GDP contracted 6.56% q/q, saar in 2Q15, following the positive growth at 2.3% q/q saar in IQ. Breakdown of 2Q GDP by expenditure highlights that the notable contraction in the economy (in %q/q saar terms) was mainly dragged by export sector weakness (especially for tech products). On the domestic front, GDP expenditure data showed decent growth in private consumption in 2Q, though GDP industry data suggested that consumption-related sectors, such as wholesale and retail trade, remained subdued. Meanwhile, fixed investment growth rebounded decently in 2Q, which may hint at some potential moderate recovery for the economy going into 2H15. Watching for signs of 21115 improvement in external demand The significant weakness in Taiwan's 2Q GDP, with the most severe quarterly GDP contraction (in Voq/q saar terms) since the worst moments of the global financial crisis, was mainly dragged by the export and manufacturing sectors, with the notable underperformance of the tech sector (tech IP fell significantly at 34.5% 3m/3m saar in June). Looking ahead, on the external front, our global team continues to expect stronger global growth in 2H15, which will hopefully provide some support for moderate recovery in Taiwan's export and manufacturing sector. In this regards, it is with noting: (1) Taiwan's July exports improved moderately (up 3.2% m/m sa in real terms); (2) tech exports, following the significant weakness in 2Q, rebounded 7.7% m/m sa in July; (3) capital goods imports rose notably at 93.6% m/m sa and 13.2% m/m sa in July and Jun