Taiwan’s economy is expected to have grown faster in the first quarter due to a surge in exports fueled by strong demand for technology used in artificial intelligence (AI) applications. A Reuters poll of 18 economists predicts that Gross Domestic Product (GDP) will have expanded by 5.65% year-on-year from January to March, higher than the 4.93% increase recorded in the fourth quarter of 2023.
Economists believe that first-quarter exports increased by 12.9% compared to the previous year, a significant improvement from the 3.4% growth seen in the fourth quarter. Taiwan’s tech-heavy exporters, especially chipmakers, benefited from this surge in AI-related demand. As a result, the manufacturing sector has regained momentum, and unemployment rates remain low. Analysts predict that the first quarter will likely see the strongest GDP growth this year, with a potential slowdown to 3.5% in the second quarter.
The government’s statistics bureau has raised its forecast for full-year 2024 growth to 3.43%, up from a previous estimate of 3.35%. In 2023, Taiwan’s economy expanded by just 1.31%, marking its slowest growth rate in 14 years. Despite this slowdown, China, Taiwan’s largest export market, also experienced faster-than-expected growth in the first quarter, expanding by 5.3% year-on-year.
Taiwan plays a critical role in the global technology supply chain and is home to many major companies like Apple and Nvidia as well as being home to the world’s largest contract chipmaker – Taiwan Semiconductor Manufacturing Co., preliminary GDP data for Taiwan will be released soon followed by revised figures with more detailed analysis and forward-looking forecasts