Taiwan's economy beats estimates on pre-tariff export rush
[TAIPEI] Taiwan's economy grew much faster than expected in the first quarter, fuelled by a surge in exports as companies rushed to ship goods ahead of looming US tariffs.
Gross domestic product expanded 5.37 per cent from a year earlier, according to a statement by the statistics bureau in Taipei on Wednesday (Apr 30). That compares with the 3.6 per cent growth estimated by economists surveyed by Bloomberg.
Taiwan's export-oriented economy has benefited from a surge in global demand for its high-tech products underpinning AI development in recent years. Exports from the island in March rose to a record US$49.6 billion, with shipments to the US and Asean countries also seeing new highs in that month.
On April 2, US President Donald Trump announced sweeping 'reciprocal tariffs' on almost all economies. Taiwan was slapped with a 32 per cent levy, although the higher duty was later postponed for 90 days.
The tariff threat has prompted economists and analysts to lower their estimates for Taiwan's economic growth this year, with Morgan Stanley cutting its forecast to 2.2 per cent from 3.4 per cent. The Chung-Hua Institution for Economic Research, a semi-official think tank based in Taipei, even projected that growth could drop to 0.16 per cent in the worst-case scenario.
With uncertainty looming, Morgan Stanley analysts expect Taiwan's central bank to begin its rate-cutting cycle as early as September.
Taipei has pledged to reduce non-tariff trade barriers and said it would increase purchases of American energy, agricultural products and military goods. The island's Premier Cho Jung-tai has said that trade talks are expected to take place in May.
Earlier in April, Taiwan Semiconductor Manufacturing, Taiwan's biggest company and the go-to supplier of the most advanced chips for Nvidia and Apple, reported better-than-expected results for the first quarter. The firm continued to hold an optimistic outlook for growth this year despite the tariff risks. BLOOMBERG
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