By Faith Hung and Jeanny Kao
TAIPEI (Reuters) -Taiwan's trade-dependent economy grew less than expected in the fourth quarter of 2024 but managed the fastest growth in three years last year at 4.3%, reaping the benefits of the AI boom and a recovery in demand from China.
Analysts warned of uncertainty in the year ahead, however, potentially affected by U.S. President Donald Trump's tariff policies or calls to boost production in the United States, which Taishin Investment Advisory analyst Kevin Wang said could influence Taiwanese companies' investment planning.
Taiwan is a key part of the global technology supply chain for companies such as Apple (NASDAQ:AAPL) and Nvidia, and is home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co,.
Gross domestic product grew a preliminary 1.84% in the October-December period from a year earlier, the statistics agency said on Friday, missing the 2.0% growth forecast by analysts in a Reuters poll. It was also slower than the 4.17% expansion in the third quarter.
"Q4 growth was below forecasts mainly due to a substantial increase of imported equipment, which offset the contribution of exports, even though AI applications and information and telecommunications products led to a 9.09% gain in exports year on year," Taishin Investment Advisory's Wang said.
Quarter-on-quarter, the economy in October-December grew at a seasonally adjusted annualised rate of 2.04% .
Fourth-quarter exports rose 9.1% year-on-year, slightly faster than the third-quarter's 8.1%, powered by tech-heavy exporters including chipmakers that got a boost from AI-related demand.
Full-year growth of 4.3% was in line with the statistics bureau's November forecast of 4.27% and the fastest pace in three years. In 2023, the economy expanded 1.31%, a 14-year low.
The statistics agency is due to release first-quarter GDP data on Feb. 26, when it will also update its full-year forecast.