Taiwan’s economy is expected to have grown faster in the first quarter of 2024, driven by a rebound in exports. A Reuters poll of 18 economists predicts a GDP growth of 5.65% during January-March compared to the same period last year. This growth is higher than the 4.93% year-on-year increase seen in the fourth quarter of 2023.
The strong performance in exports in the first quarter, with a 12.9% year-on-year growth, can be attributed to the increased demand for technology that powers artificial intelligence applications. Taiwan’s tech-heavy exporters, particularly chipmakers, benefitted from this demand. As a result, the manufacturing sector is experiencing a resurgence, and unemployment rates remain low.
SinoPac Securities Investment analyst Mickey Liao believes that the first quarter will see the highest GDP growth this year, with a forecasted dip to 3.5% in the second quarter. The Taiwan government had raised its forecast for full-year 2024 growth to 3.43% earlier this year. In 2023, the economy grew at its slowest pace in 14 years, expanding by 1.31%.
Despite concerns about global economic instability and challenges in Taiwan’s largest export market China, experts predict strong GDP growth in the first quarter of 2024. Taiwan plays a crucial role in the global technology supply chain and caters to companies like Apple and Nvidia. The preliminary GDP reading will be released soon with revised figures and forecasts to follow in the coming weeks.
In conclusion, Taiwan’s trade-dependent economy is expected to have grown faster in Q1 of 2024 due to increased demand for technology that powers AI applications from countries around the world. This strong performance has led to resurgence of manufacturing sector and low unemployment rates among tech heavy exporters such as chipmakers who have benefitted from this demand.
