Taiwan’s economy up 5.09% in Q2 ’24

Taiwan’s economy, heavily reliant on trade, exceeded expectations with a robust 5.09 per cent growth in the second quarter of 2024, according to the statistics agency’s preliminary report released Wednesday.

The growth was driven by high demand for new technologies, especially in artificial intelligence (AI), surpassing analysts’ predictions of 4.8 per cent.

Despite a slight slowdown from the first quarter’s 6.56 per cent expansion, Taiwan’s economy showed resilience.

Taiwan, a crucial hub in the global technology supply chain for major companies like Apple and Nvidia, boasts the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC).

“All indexes monitoring investments were better in Q2 than Q1…there’s been a notably significant rise in demand for machinery equipment,” official Tsui-hua Wang of the Directorate-General of Budget, Accounting and Statistics told reporters.

During this period, the GDP surpasses expectations, leading analysts to revise full-year forecasts to 3.5 per cent – four per cenrt or higher, citing strong export and investment performance, stated Jeng-yu Liu, an analyst at First Capital Management.

The likelihood of Taiwan’s central bank raising interest rates at the upcoming September meeting is considered low by analysts.

On a quarter-on-quarter basis, the seasonally adjusted annualised growth rate settled at 0.13 per cent. The technology sector, bolstered by international demand for AI products, is expected to continue propelling economic momentum.

Exports in the second quarter increased by 9.9 per cent compared to the same period in 2023, slightly lower than the first quarter’s growth rate of 12.9 per cent.

However, Taiwan’s largest export market, China, experienced a significant slowdown in economic growth during the second quarter.

China’s economy, Taiwan’s major export destination, grew slower than anticipated in the second quarter, expanding by 4.7 per cent. This was the slowest growth since the first quarter of 2023 and fell short of the 5.1 per cent forecast by analysts in a Reuters poll.

Attribution: Reuters