Exports drive Taiwan’s first-quarter 6.51% GDP growth

• By Crystal Hsu / Staff reporter

Taiwan’s economy last quarter expanded 6.51 percent from a year earlier, beating the government’s February prediction by 0.59 percentage points, thanks to stronger-than-expected exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday, citing its advance estimate report.

The showing was the best in 11 quarters and would raise GDP growth for this year from 3.43 percent to 3.57 percent in the absence of major shocks, DGBAS official Wang Tsui-hua (王翠華) said.

The statistics agency is due to revise its official growth projection later this month.

Exports of goods and services surged 10.21 percent during the January-to-March period, higher than the forecast by 2.8 percentage points, as global demand for artificial intelligence applications flourished, Wang told a news conference in Taipei.

Imports expanded 2.16 percent, reversing an expected decline, as firms bought more raw materials for export manufacturing, DGBAS said.

In all, external demand contributed 5.46 percentage points to the first-quarter economic performance, Wang said.

Domestically, private consumption grew 4.14 percent, as retail sales increased 3.1 percent while restaurant revenues hiked 8.08 percent, buoyed by the Lunar New Year holiday, she said.

A pickup in property deals gave a boost to the sales of home appliances, furniture and decoration products, while an equity rally drove up incomes and brokerage fees for securities houses, Wang said.

Outbound travel soared 93.97 percent in terms of tourist visits, but the surge had a very limited impact on GDP, she said.

Taiwan has consistently displayed a tourism deficit, except during the COVID-19 pandemic when border controls were in place, Wang said.

Outbound travel last year recovered 85 percent of its pre-pandemic volume should continue to improve, she said, adding that the uptrend would squeeze domestic tourism.

Government spending and capital formation underperformed with a small increase of 1.26 percent and a decline of 4.47 percent respectively, the DGBAS said.

In particular, purchases of capital equipment shrank 18.67 percent year-on-year, indicating that Taiwanese companies were cautious about capital expenditures due to lukewarm end-market demand, Wang said.

Altogether, domestic demand registered a mild 1.16 percent increase, leaving exports to be the main growth driver.

Compared with the preceding quarter, GDP growth expanded 1.13 percent after seasonal adjustments, the agency said.

The impressive year-on-year advance also had to do with a low base that would fade away quarter by quarter, Wang said.