The Taiwanese economy expanded by a whopping 6.51% at the beginning of 2024, which is the highest point in the past three years. These records have been partly attributed to the advent of the international AI market, a steadily growing demand for our AI products abroad.
The first quarter GDP growth recorded the highest rate since the second quarter of 2021 when the local economy grew 8.07 percent, the DGBAS revealed. The advance estimate indicated that first-quarter economic development was 0.59 percentage points higher than the forecast of February, exports in both merchandise and services reached 10.21 percent, 2.80 percentage points higher than the forecast earlier.
AI Export Drives of Taiwan’s Economic Performance
The AI demand brought the exports at the best in 11 quarters and 0.59% above forecast quarterly growth made by DGBAS since February. DGBAS indicated that the output was higher than expected due to better exports and private consumption which went on momentum, according to CNA.
Led by the advancements in artificial intelligence developments, which boosted the global demand as well as exports of goods from Taiwan, the first quarter also saw an increase in terms of services exports, which also led to growth. Wang Tsui-hua (王翠華) from DGBAS, a consultant on AI development, made such an announcement to reporters, saying that artificial intelligence serves as a lead in outbound sales of the local tech industry in the first quarter.
Wang revealed that the export growth in telecommunications and audio-visual products was twice the growth rate of all product categories, which decreased by 100%. While Wang said machinery, chemicals, metals, and special chemicals went up monthly compared to the level last year, so we can see more and more industries come back to life.
Export rise can be negated by a strong domestic consumption surge
As for the domestic demand, the DGBAS also projected private consumption to grow 4.14 percent for the 1st quarter, an increase of 0.24% compared with their previous estimate. Wang pointed out that during covid, the number of citizens delaying foreign travel increased rapidly, which missed the pre-pandemic level in Q1, which contained many holidays, such as the Lunar New Year. And since many people are crossing borders, DGBAS tries to attract domestic patronage through its means.
Revised Full-Year Forecast Shows Optimism
DGBAS has stated that in February, the output for the full-year economic growth forecast for 2024 is 3.43%. The DGBAS has made changes in its full-year growth forecast from 3.5% to 3.57% because of the higher-than-expected growth in Q1. Growth decelerated more than the expected 2.17% last year, slowing the economy to its lowest pace of 14 years.
The growth of China, the largest export market of Taiwan, was better than expected in the first quarter, reversing up and rising 5.3% year on year and exceeding forecasts. Taiwan is a major link in the global information technology supply chain for corporations such as Apple, Intel, and Nvidia, as well as the world’s largest contract chipmaker- Taiwan Semiconductor Manufacturing Co.
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