TAIPEI (Reuters) – Taiwan’s trade-dependent economy is likely to accelerate further in the first quarter, supported by a recovery in exports, amid strong demand for technology powering artificial intelligence (AI) applications, the report said. , a Reuters poll showed on Monday.
Gross domestic product (GDP) is expected to expand by 5.65% in the January-March period from a year ago, according to a survey of 18 economists. GDP in the fourth quarter of 2023 increased by 4.93% compared to the same period last year.
Economists’ forecasts for preliminary gross domestic product (GDP) figures to be released on Tuesday ranged from a 4.2% increase to as much as 7%.
Exports rose 12.9% year-on-year in the first quarter as Taiwan’s high-tech exporters such as semiconductor manufacturers rode the wave of AI demand. In comparison, the annual growth rate in the fourth quarter was only 3.4%.
Mickey Liao, an analyst at Sinopac Securities Investment, said the manufacturing sector is recovering thanks to strong exports and unemployment remains low.
“The GDP growth rate in the first quarter should be the highest this year, but it will go back to 3.5% in the second quarter, but let’s see what happens in the first quarter,” he added.
In February, the Government Statistics Bureau raised its full-year growth forecast for 2024 to 3.43% from the previous forecast of 3.35%. Last year’s economic growth rate was 1.31%, the slowest pace in 14 years.
The Chinese economy, Taiwan’s largest export market, grew faster than expected in the first quarter, expanding 5.3% year-on-year, comfortably beating expectations.
Taiwan is a key hub in the global technology supply chain for giants like Apple and Nvidia, and is also home to Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker.
Taiwan’s preliminary GDP figures will be released in a statement with minimal commentary. Revised figures will be published in the coming weeks, including more detailed information and forward-looking information.
(Polling compiled by Devayani Sathyan, Ananth Chandak and Carol Lee; reporting by Ben Blanchard and Roger Tan; editing by Shelley Jacob Phillips)