Taiwan's gross domestic product (GDP) expanded by 3.97% year-on-year in the third quarter, driven by significant contributions from the artificial intelligence (AI) sector and technology exports, coupled with increased government spending. This growth trajectory reflects robust data released by the Directorate-General of Budget, Accounting and Statistics (DGBAS). Exports of goods and services experienced an impressive increase of 8.67% from the previous year, attributed largely to the surge in AI and technology exports.
Conversely, imports rose by 13.33%, driven by strong demand which has energized both inbound and outbound trade activities. "While export growth has remained choppy but overall quite solid, base effects have led to even stronger import growth levels, which led to a smaller trade surplus compared to the same period in 2023," noted ING Research.
On the domestic front, private consumption saw a rising trend, moving upward by 1.92% in the third quarter. This increase can be largely traced back to domestic retail spending, as well as growth in recreation and tourism, alongside heightened financial market activities, especially relating to securities and fund transaction fees. Capital investments in machinery, construction, and intellectual property showcased a remarkable 15.27% rise in gross capital formation.
As highlighted by ING Research, domestic demand saw "slightly smaller contributions from private consumption and gross capital formation but a stronger boost from government spending compared to the second quarter.".