*
Preliminary Q1 GDP +5.37% y/y vs Q4 +2.9% (Reuters poll
+3.4%)
*
Full year 2025 GDP forecast raised to 3.6% vs previous
3.14%
*
Trump's tariff policies posts threat, but exports will
remain
strong -analyst
(Recasts, adds details from statistics bureau, paragraphs 3, 4,
analyst comment, paragraphs 6, 7)
By Jeanny Kao and Faith Hung
TAIPEI, April 30 (Reuters) -
Taiwan unexpectedly raised its 2025 economic growth forecast
on Wednesday after a strong first quarter performance thanks to
an export surge on strong tech demand ahead of the introduction
of possible U.S. import tariffs.
Taiwan is a key hub in the global technology supply chain
for companies such as Apple ( AAPL ) and Nvidia ( NVDA ), and
home to the world's largest contract chipmaker, Taiwan
Semiconductor Manufacturing Co Ltd ( TSM ) ,.
After reporting a preliminary 5.37% on-year gross
domestic product (GDP) expansion, the fastest rate since the
6.64% in the first quarter of 2024, the statistics agency hiked
to 3.6% its full year growth forecast, from a previous 3.14%.
Production, exports and investment all performed well in
the first quarter, with AI-driven demand helping, so with growth
exceeding expectations the full year forecast has been raised,
the Directorate General of Budget, Accounting and Statistics
said.
The first quarter performance beat the 3.4% growth forecast
by analysts in a Reuters poll and was faster than growth of 2.9%
in the fourth quarter.
"Although Trump's tariffs pose a downside threat to the
economy, we expect growth to remain strong, helped by continued
rapid growth in information and communication technology
exports," Capital Economics said in a research report.
The continued strong growth of the economy reinforces
the view that Taiwan's central bank will be one of the few in
Asia to leave interest rates unchanged over the coming year, it
added.
Quarter-on-quarter, the economy grew at a seasonally
adjusted annualised rate of 9.67%.
U.S. President Donald Trump earlier this month paused plans
for sweeping import charges on all countries for 90 days to
allow negotiations to take place.
Taiwan's tech firms have reported roaring demand thanks to
the surge in interest in AI applications.
TSMC this month reported a 60% year-on-year surge in
first-quarter net profit, beating forecasts.
China's first-quarter economic growth outstripped
expectations, underpinned by solid consumption and industrial
output.
The United States is Taiwan's second-biggest export
destination after China.
Taiwan's statistics agency will provide revised figures in a
few weeks time, with more details and forward-looking forecasts.