Taiwan’s economy is expected to have grown faster in the first quarter, driven by an increase in exports and demand for technology used in artificial intelligence (AI) applications, according to a Reuters poll. This growth is predicted to have expanded by 5.65% year-on-year during January-March, higher compared to the 4.93% year-on-year growth in the fourth quarter of 2023.
The first-quarter GDP forecast varies among economists, with expectations ranging from 4.2% to as high as 7%. The growth in exports during the first quarter was notable, with a 12.9% year-on-year increase compared to the previous quarter’s 3.4% growth. Taiwan’s tech-heavy exporters, particularly chipmakers, benefitted from the demand for AI technology.
Analysts suggest that Taiwan’s manufacturing sector is regaining strength due to strong export performance and low unemployment rates, contributing to a positive economic outlook. The government has raised its forecast for full-year 2024 growth from 3.35% to 3.43%, indicating optimism about the country’s economic prospects for the coming year after experiencing slow growth last year at a pace of only 1.31%, which was the slowest rate in over a decade.
The robust growth of China’s economy also played a significant role in supporting Taiwan’s economic performance, as it is its largest export market.
Taiwan plays a crucial role in global technology supply chains and hosts significant firms like Taiwan Semiconductor Manufacturing Co., which catered to companies such as Apple and Nvidia.
The preliminary GDP data for Taiwan will soon be released, providing more detailed insights into its economic performance during the first quarter with further forecasts to follow shortly.