Taiwan's Economy Soars: Q1 GDP Jumps 5.37% Driven by Tech and Exports

Strong Global Demand and Strategic Positioning Propel Taiwan's Impressive Economic Growth

Taipei, April 30 – Taiwan's economy demonstrated remarkable resilience and strength in the first quarter of this year, with the gross domestic product (GDP) surging by an impressive 5.37% compared to the same period last year. This robust growth, announced by the Directorate General of Budget, Accounting and Statistics (DGBAS), was fueled primarily by stronger-than-anticipated exports.

The Q1 GDP growth significantly outperformed the previous forecast of 3.46% released in February. The DGBAS attributed this positive revision to a surge in exports, as international clients accelerated order placements to avoid the potential impact of the Trump administration's tariff policies.

This quarterly performance marks the highest GDP growth since the first quarter of 2024, when the nation's GDP rose by 6.64% year-on-year, according to DGBAS data.

Wang Tsui-hua (王翠華), a specialist at the DGBAS, noted that while the political climate created some economic uncertainties, robust global demand for artificial intelligence applications and other emerging technologies significantly benefited Taiwan's export sector.

During the January-March period, exports of merchandise and services experienced a substantial increase of 20.11%, exceeding the previous forecast by 10.13 percentage points. This surge was largely driven by buyers seeking to build up inventories in anticipation of potential tariff-related disruptions, as revealed by DGBAS data.

Taiwan's imports of merchandise and services also saw a significant upswing, rising by 23.66%, a remarkable increase of 12.13 percentage points compared to earlier projections.

Based on the latest import and export figures, net foreign demand contributed approximately 1.03 percentage points to the Q1 GDP growth, according to the DGBAS.

The rising adoption of emerging technologies prompted local enterprises to increase investments and expand production capabilities. This led to a significant jump in imports of capital equipment, which surged by 73.51% in the first quarter, as per DGBAS data.

Capital formation, encompassing both private and public investments, rose by 14.72% during the first quarter, exceeding the earlier forecast by about 8.31 percentage points. Wang stated that this increase was fueled by the business sector's continued commitment to expanding capital expenditure to meet robust global demand.

Private consumption rose by 1.22% in the first quarter, as the Lunar New Year holiday spurred spending on various goods and services. However, this growth was 0.88 percentage points lower than the previous forecast, according to the DGBAS.

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

Overall, domestic demand grew by 5.03% in the first quarter, contributing 4.34 percentage points to GDP growth, according to the DGBAS.

Initially, Trump announced comprehensive "reciprocal" tariffs on April 2 affecting countries with significant trade surpluses with Washington, including a 32% import duty on goods from Taiwan, before issuing a 90-day pause a week later.

Wang anticipates that the 90-day pause will positively impact Taiwan's export-oriented economy during the first half of the year, while also acknowledging increased uncertainties in the second half.

The DGBAS plans to update its 2025 GDP growth forecast at the end of May.

In late February, the DGBAS projected a 3.14% economic growth for 2025. Several research institutions have since revised their forecasts downward, below the 3% mark, due to the potential impact of Trump's tariffs.