Taiwan's GDP grows 5.37% in Q1 advance estimate

Taipei, April 30 (CNA) Taiwan's gross domestic product (GDP) rose a robust 5.37 percent from a year earlier in the first quarter of this year on the back of stronger than expected exports, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

The first quarter GDP growth was 1.91 percentage points higher than the previous forecast of 3.46 percent made in February as local exporters benefited from an increase in shipments, with clients rushing to place orders ahead of schedule to avoid the Trump administration's tariff policies, the DGBAS added.

The quarterly growth was the highest since the first quarter of 2024, when the country's GDP rose 6.64 percent from a year earlier, according to the DGBAS data.

Speaking with reporters, Wang Tsui-hua (王翠華), a specialist at the DGBAS, said while Trump's tariffs created economic uncertainties, global demand for artificial intelligence applications and other emerging technologies remained solid, benefitting Taiwan's outbound sales.

During the January-March period, Taiwan's exports of merchandise and services soared 20.11 percent, 10.13 percentage points higher than the previous forecast, at a time when many buyers scrambled to build up inventories amid tariff concerns, the DGBAS data indicated.

The DGBAS said Taiwan's imports of merchandise and services also surged 23.66 percent, an upgrade of 12.13 percentage points from the earlier forecast.

Based on the latest import and export data, net foreign demand contributed about 1.03 percentage points to first quarter GDP growth, according to the DGBAS.

The rising popularity of emerging technologies prompted local enterprises to invest more and expand production causing imports of capital equipment to jump 73.51 percent in the first quarter, the DGBAS data showed.

Capital formation, which includes private and public investment, rose 14.72 percent during the first quarter, about 8.31 percentage points higher than the earlier forecast as the business sector continued to increase capital expenditure to meet strong global demand, Wang said.

Private consumption rose 1.22 percent in the first quarter as the Lunar New Year holiday boosted spending on food/beverage, leisure and entertainment among other services, but the growth was 0.88 percentage points lower than the previous forecast, the DGBAS said.

Government consumption rose 0.53 percent in the January-March period, about 1.57 percentage points lower than the previous estimate, the DGBAS added.

As a whole, domestic demand rose 5.03 percent in the first quarter, contributing 4.34 percentage points to GDP growth, according to the DGBAS.

Trump first announced sweeping "reciprocal" tariffs on April 2 on countries that have high trade surpluses with Washington, including a 32 percent import duty on goods from Taiwan, before announcing a 90-day pause a week later.

Wang said the 90-day pause is expected to boost Taiwan's export-oriented economy in the first half of this year, but uncertainties will increase in the second half.

The DGBAS said it will update its 2025 GDP growth forecast at the end of May.

In late February, the DGBAS forecast the local economy will grow 3.14 percent in 2025, while several research institutions have downgraded their forecasts to below the 3 percent mark, citing the impact of Trump's tariffs.