Taiwan's 2024 GDP growth forecast raised to 4.27%

Taipei, Nov. 29 (CNA) Taiwan's real gross domestic product (GDP) is predicted to grow 4.27 percent year-on-year in 2024, up from the previous estimate of 3.9 percent, according to data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on Friday.

The optimistic forecast, potentially marking the highest growth in three years, was made following better-than-anticipated levels of exports and stable domestic investments, the DGBAS said.

DGBAS deputy head Tsai Hung-kun (蔡鴻坤) said at a press conference that the GDP growth prediction was higher than the global average, partially because the baseline in 2023 was relatively low.

Taiwan's export growth was uneven, with artificial intelligence (AI) boosting exports of electronic components and information and communication products. On the other hand, due to a global surplus supply, the old economy sector exported at weak levels, Tsai said.

AI also drove up demand for computing power, which is one of Taiwan's strengths, Tsai added.

Annual exports are expected to reach US$474.5 billion in 2024, up 9.72 percent from the previous year.

Because of the AI boom, semiconductor manufacturers expanded production of advanced processes and high-end testing and packaging, Tsai said, adding that they also continued investing in research and development.

Tsai pointed out, however, that housing market prospects remained unclear, limiting some investments.

The overall forecast of domestic investments was estimated to reach 4.47 percent this year, up 0.84 percentage points from the previous prediction, DGBAS data showed.

Meanwhile, the annual consumption estimate was lowered by 0.06 percentage points to 2.72 percent from 2.78 percent, the data indicated.

Tsai explained that factors such as the rise in basic pay, a raise for civil servants, and a bullish stock market are all positive for consumption. However, consumption will be limited by the lack of population growth.

According to the DGBAS, given that successive typhoons have driven up produce prices and rising costs for services such as dining out, rent, and medical care continue to exert pressure, the consumer price index (CPI) is projected to increase by 2.18 percent in 2024, a slight rise of 0.01 percentage points from the previous estimate.

As produce prices are expected to stabilize and prices for global raw materials and oil are also expected to fall, the CPI growth for 2025 is predicted to slow down to 1.93 percent on a high basis, despite service prices continuing to rise, the DGBAS said.