The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday upgraded its first-quarter GDP growth expectation for Taiwan to 5.37 percent after in February estimating 3.46 percent for the period.
The upgrade reflects stronger-than-expected exports due to demand for technology goods, and solid capital formation on the part of the government, public enterprises and private firms, the agency said in a statement.
“Due to the strong demand for electronic, and information and communications products, real exports of goods and services grew by 20.11 percent year-on-year” in the first quarter, the statement said, adding that “imports also grew by 23.66 percent year-on-year.”
Photo: Ritchie B. Tongo, EPA-EFE
“Regarding gross capital formation, investments in machinery equipment, construction and intellectual property products increased,” it said.
Combining inventory changes, real gross capital formation expanded 14.72 percent year-on-year, it said.
The 5.37 percent GDP growth in the January-to-March quarter accelerated from 2.90 percent in the previous quarter and marked the strongest expansion since the first quarter last year, when it was 6.64 percent, DGBAS data showed.
The agency’s preliminary GDP data, which are to be revised after more data are collected in the coming weeks, exceeded Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of 4.2 percent.
“Exports of artificial intelligence-related goods are booming and uncertainty over US tariffs has led manufacturers to front-load goods in advance, while firms continue to invest in advanced semiconductor process technologies and a stable labor market supports domestic consumption,” Yuanta said of its prediction in a note ahead of the DGBAS statement.
In February, the DGBAS forecast Taiwan’s full-year economic growth would be 3.14 percent.
However, several research institutes in the past few weeks revised their predictions to below 3 percent, citing US tariff concerns and shifting dynamics in global trade.
US President Donald Trump on April 2 imposed a 32 percent “reciprocal” tariff on Taiwan, but on April 9 paused it for 90 days, although a 10 percent baseline tariff remains in place.
The initial tariffs would still have a substantial effect on growth, given Taiwan is a trade-reliant economy and the US accounted for 23.4 percent of Taiwan’s overall exports last year.
The Chung-Hua Institution for Economic Research (中華經濟研究院) last month cut its full-year GDP growth forecast to 0.16 percent in the worst-case scenario.
Last week, the IMF forecast that Taiwan’s economy would grow 2.9 percent, while S&P Global predicted 2.1 percent GDP growth this year.
If growth rates in the final three quarters follow the DGBAS’ forecasts, this year’s GDP growth would be 3.6 percent, the agency said yesterday, although the projection did not take into account the effects of US tariffs.
The agency is scheduled to update its full-year GDP growth data at the end of this month.
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