TAIWAN’S export orders contracted for a fifth month in August as demand from the Chinese mainland and key markets continued to deteriorate, putting the economy on track for its slowest growth in six years.

    The bigger-than-expected order decline does not bode well for trade-reliant Asian economies hoping for a recovery in exports heading into the year-end shopping season and raises the chances that Taiwan’s “central bank” will cut interest rates.

    A slowdown on the Chinese mainland, among the two biggest markets for Taiwan, is weighing on the island province’s exports and has prompted the Taiwan authority to slash its 2015 full-year economic growth forecast to 1.56 percent from 3.28 percent previously.

    Annual export orders in August declined 8.3 percent, Taiwan’s “Ministry of Economic Affairs” said, worse than the 4.6 percent slide forecast in a Reuters poll.

    U.S. order growth fell to a mere 0.6 percent in August from nearly 11 percent growth in July. Orders declined from other major markets, down 14.8 percent from the Chinese mainland, 12.1 percent from Europe and 17.1 percent from Japan, the “ministry” said.

    The 8.3 percent contraction in overall export orders was the worst since August 2009 when ruling out distortions from the Lunar New Year, the “ministry” told a news conference. The dates of the long holiday are different in every year according to the lunar calendar.

    Taiwan’s export orders, which are seen as an indication of the strength of Asian exports and of global demand for technology, have been contracting after surging last year from strong demand for Apple Inc.’s iPhones.

    The drag from exports on economic growth has raised the possibility its “central bank” may cut Thursday its policy interest rate for the first time since 2009.

    Economist Tim Condon of ING said in a research report ahead of the data the current gap between orders growth and shipment growth was the widest since the global financial crisis.

    “An obvious explanation that comes to mind is that customers cancelled orders at the last minute,” he said.

    On the bright side, manufacturers may get a lift from the release of new Apple products in the fourth quarter.

    Orders in Septembers are likely to exceed August’s US$35.03 billion in August, the “ministry” said, though it has said that it did not rule out a full-year drop in overall export orders.

    Among the seven major categories, only information and communications products posted year-on-year growth in August, up 4.7 percent. (SD-Agencies)