Taiwan’s technology-driven economy is expected to have experienced faster growth in the first quarter of 2024, thanks to a surge in demand for technology used in artificial intelligence (AI) applications. According to a recent Reuters poll of 18 economists, Taiwan’s Gross Domestic Product (GDP) is predicted to have grown by 5.65% year-on-year from January to March, surpassing the 4.93% increase recorded in the fourth quarter of 2023.
Taiwan’s tech-heavy exporters, particularly chipmakers, benefited significantly from the surge in AI-related demand. As a result, the manufacturing sector regained momentum, and unemployment rates remained low. Economists believe 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 over a decade. Despite this, China, Taiwan’s largest export market, also experienced faster-than-expected growth in the first quarter of 2024, expanding by an impressive 5.3% year-on-year.
Taiwan plays a critical role in the global technology supply chain and serves major companies like Apple and Nvidia. It is also home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co., which has contributed significantly to its success as an exporter and manufacturer of high-tech goods. The preliminary GDP data for Taiwan will be released soon followed by revised figures with more detailed analysis and forward-looking forecasts.
In summary, Taiwan’s economy is expected to have grown faster than anticipated due to higher exports fueled by strong demand for AI technology applications during Q1 of 2024. The government has raised its forecast for full year growth while China also experienced fast expansion during Q1 despite slower GDP expansion compared to Q4 of last year