Taiwan’s economy is expected to have grown at a faster pace in the first quarter, according to a Reuters poll. This growth was driven by an increase in exports fueled by demand for technology used in artificial intelligence (AI) applications. Economists predict that Gross Domestic Product (GDP) likely expanded by 5.65% year-on-year during January-March, higher than the 4.93% year-on-year growth in the fourth quarter of 2023.
The forecast for first-quarter GDP growth varies among economists, with expectations ranging from 4.2% to as high as 7%. The increase in exports during the first quarter was particularly notable, with a 12.9% year-on-year increase compared to the 3.4% growth in the previous quarter. 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. The government’s statistics bureau raised its forecast for full-year 2024 growth to 3.43% from a previous prediction of 3.35%. Last year, Taiwan’s economy grew by just 1.31%, the slowest pace in over a decade.
The robust growth of China’s economy, Taiwan’s largest export market, also played a significant role in supporting Taiwan’s economic performance. Taiwan is a crucial player in the global technology supply chain, catering to companies like Apple and Nvidia, as well as hosting significant firms like Taiwan Semiconductor Manufacturing Co.
Taiwan’s preliminary GDP data for the first quarter will be released soon, providing more detailed insights into its economic performance with further forecasts to follow in coming weeks.
In conclusion, Taiwan’s trade-dependent economy is expected to have grown faster during the first quarter due to an increase in exports driven by demand for AI technology applications. The manufacturing sector is regaining strength due to strong export performance and low unemployment rates while China’s robust economic performance played a significant role supporting Taiwan’s economic performance