Taiwan’s economy, which is heavily reliant on exports, is projected to have grown faster in the first quarter. The growth was driven by a rebound in exports fueled by strong demand for technology used in artificial intelligence (AI) applications. According to a poll of 18 economists, Gross Domestic Product (GDP) is expected to 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 predict that first-quarter exports increased by 12.9% compared to the previous year, significantly better than the 3.4% growth seen in the fourth quarter. Taiwan’s tech-heavy exporters, especially chipmakers, benefited from a surge in AI-related demand, which helped revive the manufacturing sector and kept unemployment rates low. Analysts believe that this 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 full-year growth forecast for 2024 from 3.35% to 3.43%. In contrast, Taiwan’s economy grew at its slowest rate in over a decade in 2023 with an expansion of just 1.31%. China, Taiwan’s largest export market, also experienced faster-than-expected growth in the first quarter with an increase of 5.3% year-on-year compared to the same period last year.
Taiwan plays a crucial role as a global technology supplier and serves major companies like Apple and Nvidia. It is also home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co., making it an essential cog in global technology production chains.
Soonly preliminary GDP data for Taiwan will be released before revised figures with more detailed analysis and forward-looking forecasts are available.
In conclusion, Taiwan’s trade-dependent economy is expected to have grown faster in the first quarter due to a surge in demand for technology used in AI applications fueling strong GDP growth of about 5