Taiwan’s Economy Expected to Grow Faster in Q1 Due to Demand for AI Technology and Low Unemployment Rates

Taiwan’s economy is expected to have grown faster in the first quarter, according to a Reuters poll. This growth is supported by an increase in exports driven by demand for technology used in artificial intelligence (AI) applications. Economists predict that Gross Domestic Product (GDP) likely expanded by 5.65% year-on-year during January-March. This growth is higher compared to the 4.93% year-on-year growth in the fourth quarter of 2023.

The first-quarter GDP forecast varies among economists, with expectations ranging from 4.2% to as high as 7%. The growth in exports in the first quarter was notable, with a 12.9% year-on-year increase compared to the 3.4% growth in the previous quarter. Taiwan’s tech-heavy exporters, particularly chipmakers, benefitted from the demand for AI technology.

The manufacturing sector in Taiwan is regaining strength due to strong export performance and low unemployment rates, contributing to a positive economic outlook. 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%, the slowest pace in 14 years.

Taiwan is a crucial player in the global technology supply chain and has significant firms like Taiwan Semiconductor Manufacturing Co., catering to companies like Apple and Nvidia, as well as hosting significant firms like Foxconn Electronics Co., one of China’s largest private sector employers.

Analysts suggest that Taiwan’s robust growth can be attributed not only to its tech industry but also to China’s growing economy, which plays a vital role as Taiwan’s largest export market.

The preliminary GDP data for Taiwan will be released soon, providing insights into the economic performance in the first quarter with more detailed figures and forecasts to follow in the coming weeks.

In summary, Taiwan’s trade-dependent economy is expected to have grown faster than last year due to an increase in exports driven by demand for AI technology and low unemployment rates contributing positively towards its manufacturing sector regaining strength while being crucial player globally with significant firms operating within it and benefitting from China’s robust growing economy