Taiwan's Q1 GDP grows fastest in more than a decade

FILE PHOTO: A construction site in seen during sunset in Taipei, Taiwan, February 19, 2021. REUTERS/Ann Wang

TAIPEI (Reuters) – Taiwan’s economy grew at its fastest pace in more than a decade in the first three months of 2021 as the “work from home” boom sparked strong global demand for the island’s hi-tech exports and charged up the economy.

Gross domestic product (GDP) grew 8.16% in January-March from a year earlier, preliminary data from the statistics agency showed on Friday, up from the fourth quarter’s 5.09% rise.

The reading was well above the 6.1% increase forecast in a Reuters poll and was the fastest pace since growth of 11.54% in the third quarter of 2010.

Compared with the fourth quarter, the seasonally adjusted annual rate of growth was 12.93% in the first quarter. The government attributed the strong growth to surging demand for electronics, driven by new technologies such as 5G and by people working from home globally due to the coronavirus pandemic.

Revised GDP figures will be released later in May. Trade-dependent Taiwan has managed to keep the COVID-19 pandemic under control and avoid lockdowns, with life continuing more or less as normal. It has begun rolling out vaccines but Taiwan’s borders remain largely closed. The tech-powerhouse island, home to the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd (TSMC), has benefited from global demand for smartphones, tablets and computers from people forced to study and work from home in large parts of the world.

A global shortage of chips for everything from cars to consumer electronics has also bolstered demand for made-in-Taiwan semiconductors, where producers are busy expanding capacity.

China, Taiwan’s largest trading partner despite persistent political tensions, saw its economic recovery quicken sharply in the first quarter to record growth of 18.3% from last year’s deep coronavirus slump.

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