Retail in Asia

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Taiwan edges out of recession but outlook cut again

Taiwan’s economy edged out of recession in the first quarter, but in a sign that Asia’s exporters are not quite out of the woods yet, the government cut its full-year forecast for a fourth time and flagged an increased inflation risk.

After two quarters of contraction, the economy grew 0.26 percent in the first quarter from the fourth, marking what is likely the bottom for the current cycle. But the government trimmed its forecast for 2012 to 3.38 percent from 3.85 percent, showing that recovery will be uneven.

Taiwan is one of the most open of Asia’s exporters, with an exports-to-GDP ratio of 74 percent, making it extra-vulnerable to declines in external demand. With Europe wobbling and the US recovery not yet clear cut, there are risks ahead.