Taiwan’s Tech-Driven Economy Booms in Q1 2024 on Strong AI Demand

Taiwan’s economy, driven by its tech-heavy exports, is expected to have grown faster in the first quarter of 2024. This growth was fueled by strong demand for technology used in artificial intelligence (AI) applications. According to a Reuters poll of 18 economists, Gross Domestic Product (GDP) 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, a significant improvement from the 3.4% growth seen in the fourth quarter. Taiwan’s chipmakers benefited greatly from this surge in AI-related demand, which helped regain momentum in 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 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 and a half years ago