Taiwan’s export-dependent economy contracted more than expected in the first quarter and slipped into recession as exports were hit by slowing global tech demand and broader economic woes but should hit a 2% growth target this year, reported Reuters.

Gross domestic product (GDP) shrank 3.02 % in January-March from a year earlier, following a contraction of 0.41% in the previous quarter, preliminary data from the statistics agency showed on Friday.

That marked the economy’s worst performance since 2009 and lagged a fall of 1.25% predicted in a Reuters poll.

“The first-quarter GDP was the worst since the financial crisis,” Wu Pei-hsuan from the Directorate General of Budget, Accounting and Statistics told reporters about the 2008-2009 global crisis.

“This quarter’s external demand was weak, but private consumption was strong.”

The statistics department said there is still a chance for the 2023 full-year GDP to hit 2 % growth.

Taiwan’s exports fell year-on-year for a seventh consecutive month in March, with the government predicting the downturn may continue until at least the fourth quarter.

Economy Minister Wang Mei-hua told reporters there were no “obvious signs of recovery” for the global economy due to high inflation and high-interest rates, and Taiwanese companies were still seeing high levels of inventory. “Everyone hopes things improve in the second half,” she said.

The agency said that Taiwan’s first-quarter exports dropped 19.17% from a year earlier in U.S. dollar terms.

Quarter-on-quarter, the economy contracted 6.37% on a seasonally adjusted annual rate.

The economy in China, Taiwan’s largest export market, grew 4.5 % in the first quarter of the year, faster than expected, as the end of strict COVID-19 curbs freed businesses and consumers from crippling disruptions.