Taiwan’s economy grew far faster than expected in the first quarter, as booming demand for artificial intelligence (AI) applications drove a surge in exports, spilling over into investment and consumption, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
GDP growth was 13.69 percent year-on-year during the January-to-March period, beating the DGBAS’ February forecast by 2.23 percentage points and marking the most robust growth in nearly four decades, DGBAS senior official Chiang Hsin-yi (江心怡) told a news conference in Taipei.
The result was powered by exports, which remain the backbone of Taiwan’s economy, Chiang said.
Photo: Edgar Su, Reuters
Outbound shipments jumped 51.12 percent year-on-year to US$195.7 billion, while exports of goods and services soared 35.25 percent as global demand for AI-related technologies boosted orders for semiconductors and other high-end components, she said.
Electronic components, and information and communications technology products accounted for 78.5 percent of exports, underscoring the economy’s deepening reliance on advanced technology shipments, she said.
Expansion by global cloud service providers is driving demand across Taiwan’s tech supply chain, Chiang said.
The export boom is feeding into broader economic activity.
Tech companies accelerated capacity expansion, and stepped up research and development spending to capture AI-driven opportunities, lifting capital formation by 5.2 percent, a sharp upward revision from earlier estimates.
Imports rose to US$142.8 billion, with purchases of capital equipment surging 33.52 percent and raw material imports climbing 38.82 percent, pointing to sustained momentum in manufacturing and production.
“Strong exports are feeding through to investment and manufacturing, creating a positive feedback loop,” Chiang said.
Domestic demand also held firm.
Private consumption grew 4.89 percent, supported by government cash handouts, stock market gains and promotional activities by businesses.
Retail sales and dining revenues increased, while spending on services such as telecommunications, leisure and transportation expanded, DGBAS data showed.
The sharp rebound in outbound and domestic travel was a significant boost to consumer spending, as increased mobility fueled demand across tourism-related sectors.
The average daily travel volume was 645,000 people during the Lunar New Year holiday in February, more than doubling the same period last year, lifting demand for transportation, dining, retail and leisure activities.
Financial-sector activity provided an additional lift, as increased equities and funds trading boosted fee income for brokerage and asset management firms, Chiang said.
Geopolitical uncertainties and uneven global demand remain key risks, although their effects have so far been limited, the DGBAS said.
Taiwan’s growth outlook remains closely tied to the trajectory of global AI investment, which continues to anchor the nation’s export-driven expansion, Chiang said.
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