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Taiwan revises up 2024 GDP growth forecast as exports recover

Published 29/02/2024, 08:03 pm
Updated 29/02/2024, 08:50 pm
© Reuters. People buy food items at a market in New Taipei City, Taiwan January 31, 2024. REUTERS/Ann Wang/file photo

By Jeanny Kao and Faith Hung

TAIPEI (Reuters) -Taiwan's trade-based economy is expected to grow at a faster clip in 2024 than previously forecast, as export demand for the island's high-tech products begins to recover, the statistics office said on Thursday.

Taiwan is a key link in the global technology supply chain for companies such as Apple Inc (NASDAQ:AAPL) and Nvidia, and is home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

The island's economy has struggled through a long period of flagging global demand for its high-tech goods, though domestic consumption has remained relatively strong.

Taiwan's gross domestic product for 2024 is now expected to be 3.43% higher than last year, the Directorate General of Budget, Accounting and Statistics said, revising upward the 3.35% forecast it issued in November.

That would be much higher than the 1.31% growth rate recorded for 2023.

"The 2024 forecast is in line with our expectations," said analyst Kevin Wang of Taishin Investment Advisory.

"The inflation outlook is still below 2%..., so the central bank would not adjust interest rates this year unless the Fed cuts its interest rates more than expected."

The statistics agency nudged up the 2024 consumer price index (CPI) forecast to 1.85% from 1.64%.

The central bank holds its next rate-setting meeting on March 21.

© Reuters. People buy food items at a market in New Taipei City, Taiwan January 31, 2024. REUTERS/Ann Wang/file photo

The economy expanded by 4.93% in the fourth quarter from a year earlier, the statistics department said, slightly revising down a preliminary 5.12% reading.

The statistics agency now sees 2024 exports climbing 6.14% versus last year from 6.33% predicted earlier. In 2023, exports dropped 9.8% on the year.

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