Taiwan’s economy outperformed forecasts in the second quarter, propelled by robust demand for advanced technologies like artificial intelligence. According to preliminary data from the Directorate-General of Budget, Accounting and Statistics, Taiwan’s GDP grew by 5.09% year-on-year from April to June, surpassing the 4.8% forecast by analysts but decelerating from a 6.56% increase in the first quarter.
As a vital player in the global technology supply chain, Taiwan is home to major firms such as Apple and Nvidia and boasts the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC). The tech sector’s strength was evident as shipments related to AI products bolstered economic performance.
Investment metrics improved markedly in the second quarter compared to the first, particularly in machinery equipment, underscoring the sector’s vitality. This surge has led some analysts to revise their full-year growth forecasts upwards to between 3.5% and 4%, with some even predicting over 4%, buoyed by solid export and investment activities.
Quarter-on-quarter, Taiwan’s economy grew at a seasonally adjusted annualized rate of 0.13%. Despite this growth, analysts see limited scope for the central bank to raise interest rates in its September meeting.
Exports in the second quarter increased by 9.9% compared to the same period last year, though this was a slight dip from the first quarter’s 12.9% rise. Meanwhile, Taiwan’s largest export market, China, experienced slower-than-expected growth, expanding by just 4.7%, its weakest performance since early 2023.
