Taiwan sank into recession in October-December, data showed Friday, posting its slowest annual growth in six years, with weak international demand and greater competition from China hitting the export-dependent island.
The growth rate of 0.85 percent in 2015 missed an earlier official forecast of 1.06 percent.
The full-year figure was dragged down by an unexpected contraction in the three months through December, the second straight quarter of declines that meets the definition of a technical recession.
"Inventories of electronic products continue to be digested, affected by weak global growth," the Directorate General of Budget, Accounting and Statistics said in a statement.
It also cited the rise of technology manufacturing -- a key sector for Taiwan -- in China and declines in raw materials as factors for the struggling economy.
Taiwan's economic woes come as China's economy last year slowed to 6.9 percent, its weakest annual rate in 25 years.
China is Taiwan's biggest export market, accounting for a quarter of products shipped.
Exports fell by a 10th last year, with sales to China dropping 12.3 percent from the previous year.
The government has been trying to spur the economy, cutting its key interest rate twice in the last two quarters and pushing a stimulus package to boost consumer spending.
Taiwanese frustrated at the anaemic economy this month elected Tsai Ing-wen from the main opposition party as the island's new leader, setting the stage for frostier ties with the mainland.
Current president Ma Ying-jeou, who was elected on a platform of greater engagement with China, has seen his popularity hit record lows due to his policies failing to translate into higher salaries and better job prospects.