Taiwan posts 5.09% year-on-year GDP growth in Q2

Taipei, July 31 (CNA) Taiwan's gross domestic product (GDP) in the second quarter of 2024 grew by roughly 5.09 percent year-on-year, lower than an earlier forecast of 5.18 percent made in May, preliminary government data showed.

The worse-than-anticipated growth was largely due to a weaker-than-expected export performance, the Directorate General of Budget, Accounting and Statistics (DGBAS) said in a report on Wednesday.

In the report, the DGBAS said that the increase in real exports of goods and services in the second quarter was 7.87 percent, 3.35 percentage points lower than was predicted in the May forecast.

Real exports refers to the quantity of goods and services sold to other countries, adjusted to account for price changes over time. The adjustment means the volume of exports can be compared without the distortion caused by inflation or deflation.

Speaking with reporters, DGBAS specialist Wang Tsui-hua (王翠華) said that the level of exports driven by demand for AI technology in April-June was not as robust as in the May forecast.

In addition, the performance of the old economy sector was weaker than expected, Wang said.

The figures

In the second quarter, the value of exports in goods was US$4.7 billion less than the earlier forecast, according to the DGBAS report.

The annual growth of exports denominated in U.S. dollars in the second quarter reached 9.91 percent, Wang said, citing the report. Although this was lower than expected, export performance remained good, she added.

Moreover, corporations have accelerated investment due to increasing demand, which is helping boost economic growth, Wang noted, saying that the economy is expected to continue improving steadily.

In the second quarter, capital formation, which includes investments from public and private investment, rose 15.34 percent from a year earlier, the highest growth in 11 quarters and a sharp increase of 10.49 percentage points from the earlier forecast, according to the report.

Solid private consumption also helped boost second-quarter GDP growth, rising 2.71 percent from a year earlier, an increase of 0.12 percentage points from the previous estimate, the DGBAS said.

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