Taiwan’s economy is poised to have grown faster in the first quarter of 2024, driven by a surge in exports fueled by strong demand for technology used in artificial intelligence (AI) applications. According to a Reuters poll of 18 economists, Gross Domestic Product (GDP) is expected to have expanded by 5.65% year-on-year from January to March, marking a significant improvement from the 4.93% increase recorded in the fourth quarter of 2023.
Taiwan’s tech-heavy exporters, especially chipmakers, benefited greatly from this surge in AI-related demand. As a result, the manufacturing sector has regained momentum and unemployment rates remain low. Analysts 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 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 only 1.31%, marking its slowest growth rate in 14 years. 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 been at the forefront of AI innovation for several years now.
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 has rebounded strongly due to increased demand for AI technology applications fueling higher exports and GDP growth rates. The manufacturing sector has regained momentum and unemployment remains low thanks to strong performance by tech-heavy exporters like chipmakers.
The government raised its forecast for full-year growth to reflect this positive trend while China also experienced faster than expected growth during Q1 due to increased demand from various industries such as eCommerce and Fintech.
Overall, Taiwan’s position as a key player in global technology supply chains along with its ability to adapt quickly makes it one of Asia Pacific region’s fastest growing economies.
