Taiwan’s trade-dependent economy grew faster than expected in the fourth quarter thanks to strong domestic consumption and a rebound in exports, expanding 1.4 per cent for the full year of 2023.

Taiwan is a key hub in the global technology supply chain for companies such as Apple and home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co.

Gross domestic product in the October-December period grew by a preliminary 5.12 per cent from a year earlier, the statistics agency said on Wednesday (Jan 31), beating the 4.35 per cent growth forecast by analysts in a Reuters poll.

Quarter-on-quarter, the economy expanded at a seasonally adjusted annualised rate of 8.79 per cent.

GDP increased 2.32 per cent year-on-year in the third quarter.

Domestic consumption has also bounced back well following the Covid-19 pandemic. Last week, restaurant chain Wowprime said it aims to hire some 400 new employees in the first quarter, given booming demand.

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“In the fourth-quarter, Taiwan was gradually turning back to the normal exports-driven growth track and private consumption remains at normal growth level, offsetting declines in investments,” said analyst Chengyu Liu of First Capital Management.

Liu expected exports would rise by 4 per cent-5 per cent this year on an annual basis, citing growing demand sparked by artificial intelligence applications and a soft landing for the US economy, and added Taiwan’s GDP would likely expand 3.2 per cent this year.

Taiwan’s exports, a main driver of the island’s economy, emerged from a year-long decline in September.

Fourth-quarter exports rose 3.4 per cent year-on-year after contracting at a 5.1 per cent annual rate in the third quarter, while the island’s trade surplus leapt 131 per cent year-on-year in the final three months of the year.

The full-year economic growth of 1.4 per cent was the slowest pace in 14 years, slightly missing the statistics bureau’s November forecast of 1.42 per cent, and lower than the 2.45 per cent growth for 2022.

The economy in China, Taiwan’s largest export market, grew 5.2 per cent year-on-year in the fourth quarter, picking up from 4.9 per cent in the third quarter, but missing a 5.3 per cent forecast in a Reuters poll.

Taiwan’s statistics agency will provide revised figures for the fourth quarter a few weeks later, with more details and forward-looking forecasts. REUTERS