Taiwan's GDP growth hits 3-year high of 4.30 percent in 2024

Taipei, Jan. 24 (CNA) Taiwan's gross domestic product (GDP) grew 4.30 percent in 2024, a three-year high, after the country reported the better-than-expected economic growth in the fourth quarter, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Friday.

An advance estimate report compiled by the DGBAS showed Taiwan's GDP growth in 2024 topped the previous estimate of 4.27 percent made in November to reach 4.30 percent, the highest level since 2021 when the country's economy grew 6.72 percent.

The DGBAS said Taiwan's 2024 GDP growth was higher than some of its neighboring countries such as Singapore (4.0 percent) and South Korea (2.0 percent).

In the fourth quarter alone, Taiwan's GDP growth hit 1.84 percent, 0.12 percentage points higher than the November estimate of 1.72 percent, driven mainly by larger-than-expected private investment, the DGBAS said.

At a news conference, DGBAS specialist Wang Tsui-hua (王翠華) said that demand for artificial intelligence (AI) applications and high-performance computing devices prompted semiconductor suppliers, in particular, developers of high-end processes, to make large investments to expand their production capacity.

The DGBAS said capital formation, which includes private and government investments, was up 17.53 percent in the fourth quarter, up 6.23 percentage points from the previous estimate.

The solid growth in capital formation contributed about 4.10 percentage points to the 2024 GDP growth, according to the DGBAS.

Private consumption in the fourth quarter grew 1.94 percent, about 0.29 percentage points higher than the previous estimate, while government consumption rose 2.26 percent, 2.03 percentage points lower than the previous estimate, the DGBAS said.

Wang said concerts held by popular singers Jay Chou (周杰倫), Andy Lau (劉德華), A-Mei (張惠妹) and rock band Mayday (五月天) in the fourth quarter boosted private consumption.

As a whole, the DGBAS said, domestic demand rose 6.27 percent in the fourth quarter, representing 5.34 percentage points of the GDP growth.

In the fourth quarter, exports in merchandise and services grew 8.19 percent on the back of AI and information and communication devices, the DGBAS said.

However, the growth was 2.09 percentage points shy of the previous estimate, while imports rose 18.30 percent, which was 0.22 percentage points lower than the earlier estimate, the DGBAS added.

Despite lower-than-expected merchandise and services exports, Wang said export momentum stayed strong.

According to Wang, Taiwan's outbound sales in the fourth quarter were US$600 million higher than the previous estimate.

By taking into account the exports and imports growth, net foreign demand dragged down 3.50 percentage points from the fourth quarter's GDP growth, the DGBAS added.

The DGBAS said it has scheduled a news conference for Feb. 26 to release an update about the 2024 GDP growth and a forecast of the 2025 growth.

In November, the DGBAS forecast Taiwan's economy would grow 3.29 percent in 2025.