Taiwan’s growth sees slowdown in Q3 ’24

Taiwan’s economic growth is projected to slow in the third quarter, with exports remaining strong due to AI demand but showing signs of moderation. Domestic investment and consumption are also weakening.

Economists forecast a GDP growth of 3.4 per cent in July-September, down from 5.06 per cent in the previous quarter, based on a Reuters poll of 24 experts conducted on Monday. Individual forecasts ranged from 2.2 per cent to 5.0 per cent.

Taiwan’s strong export performance is attributed to its leading position in the tech sector, particularly chip manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC) plays a crucial role in supplying companies like Apple and Nvidia.

However, analyst Kevin Wang of Taishin Securities Investment highlights a trend of moderation in key sectors. “Exports have grown but slowed in the third quarter, and consumption and investment haven’t performed exceptionally well either,” he noted.

The slowdown comes despite the traditionally strong second half for Taiwanese exports, which typically experience a ramp-up in production to meet holiday demand in Western markets.

The government’s official growth forecast for 2024 has been revised downward to 3.90 per cent, compared to the earlier projection of 3.94 per cent. This follows a weak 2023 performance, with GDP growth reaching a 14-year low of 1.31 per cent.

Attribution: Reuters

Subediting: Y.Yasser