Taiwan Q2 economic growth seen slowing, but supported by AI boom: Reuters poll
2024.07.29 01:40
TAIPEI (Reuters) – Economic growth in trade-dependent Taiwan probably slowed in the second quarter in spite of robust exports driven by high demand for AI technology, a Reuters poll showed on Monday.
Gross domestic product (GDP) in April-June was expected to have expanded 4.8% from a year earlier, down from 6.56% in the first quarter, according to the median forecast of a poll of 25 economists.
The first quarter’s performance – the fastest quarterly pace since the second quarter of 2021 – was propped up by exports and construction but domestic consumption remained soft.
The poll forecasts for preliminary GDP data, due on Wednesday, ranged from an expansion of 2.5% to as much as 6.8%.
Strong shipments from the technology sector will likely help Taiwan, a bellwether of global technology demand as it is a hub in the global technology supply chain for such companies as Apple (NASDAQ:) and Nvidia (NASDAQ:).
Second-quarter exports rose 9.9% year-on-year, slower than the first-quarter’s annual expansion of 12.9%, as Taiwan’s tech-heavy exporters such as chipmakers rode a wave of AI demand. The island is home to the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co.
“Exports (in Q2) were pretty solid, with stronger momentum from AI-related products,” said analyst Kevin Wang of Taishin Securities Investment Advisory. “With respect to business investments, major companies were conservative, with the exception of TSMC.”
The second half of the year is traditionally the peak season for Taiwanese exporters as they race to produce for the year-end holiday season in major Western markets.
The government’s statistics bureau in May raised its forecast for full-year 2024 growth to 3.94% from a previous 3.43%. Last year, the economy expanded 1.31%, its slowest pace in 14 years.
This month the Asian Development Bank raised its 2024 growth outlook for Taiwan to 3.5% from a previous 3% due to strong chip exports and the AI boom.
China, Taiwan’s largest export market, experienced weaker-than-expected growth in the second-quarter, which could see shipments slow to the world’s second-largest economy.
Taiwan’s preliminary GDP reading will be released in a statement with minimal commentary. Revised figures will be released a few weeks later, with more details and forward-looking forecasts.
(Poll compiled by Devayani Sathyan; Reporting by Faith Hung and Ben Blanchard; Editing by Jacqueline Wong)
