Taiwan’s Economy Surges Ahead in Q1 due to AI Demand and Export Growth
Taiwan’s economy is expected to have grown faster in the first quarter, driven by an increase in exports due to demand for technology used in artificial intelligence (AI) applications. This growth is predicted to be higher compared to the previous quarter, with a 12.9% year-on-year increase in exports.
According to a Reuters poll, economists predict that Gross Domestic Product (GDP) likely expanded by 5.65% year-on-year during January-March. However, the first-quarter GDP forecast varies among economists, with expectations ranging from 4.2% to as high as 7%.
The growth in exports was notable, particularly for Taiwan’s tech-heavy exporters such as chipmakers who benefitted from the demand for AI technology. The manufacturing sector is also 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 1.31%, which was the slowest pace in 14 years.
The robust growth in China’s economy also played a significant role in supporting Taiwan’s economic performance as it is Taiwan’s largest export market. Taiwan is a crucial player in the global technology supply chain and caters to companies like Apple and Nvidia, as well as hosting significant firms like Taiwan Semiconductor Manufacturing Co. The preliminary GDP data for Taiwan will soon be released, providing insights into the economic performance in the first quarter with more detailed figures and forecasts to follow in the coming weeks.
Overall, Taiwan’s trade-dependent economy is showing signs of recovery thanks to increased demand for AI technology and strong export performance.
