DGBAS Revises Taiwan's 2023 GDP Growth to 11.05%, Highest in Nearly 40 Years

The Directorate-General of Budget, Accounting and Statistics (DGBAS) today (14th) released its latest forecast for Taiwan's economic growth (GDP) for 2023 and 2024. Due to a stronger-than-expected first half, with economic growth reaching 14.15%—an upward revision of 1.50 percentage points—and a revised forecast of 8.27% for the second half—an increase of 1.33 percentage points—full-year GDP growth for 2023 is now projected at 11.05%, up 1.41 percentage points from the previous estimate, marking the highest level since 1988. Meanwhile, the Consumer Price Index (CPI) is forecast to rise by 2.07% year-on-year, slightly exceeding the Central Bank of Taiwan's inflation alert threshold of 2%.

DGBAS projects that Taiwan's GDP in 2023 will reach US$1.0536 trillion, with per capita GDP at US$45,332. For 2024, GDP growth is expected to remain strong at 6.04%, with per capita GDP rising to US$49,874. CPI growth is projected to ease slightly to 1.90%.

On the external demand front, robust momentum continues, particularly in Taiwan's competitive AI supply chain, where exports have surged significantly. Traditional industrial goods exports are also recovering. Additionally, tight supply-demand conditions for key components such as memory chips have driven up prices. Full-year merchandise exports are estimated at US$903.6 billion, representing a 41.19% year-on-year increase. Merchandise imports, driven by export and investment-related demand, are expected to reach US$687.5 billion, up 42.19% year-on-year.

Overall, Taiwan's real export growth in 2023 is forecast at 21.28%, up 1.35 percentage points from the prior estimate, while real import growth is projected at 21.15%, up 3.85 percentage points.

Looking ahead to 2024, DGBAS notes that although major Cloud Service Providers (CSPs) face pressure from shrinking free cash flow, the long-term growth trend for AI remains intact. Capital expenditures are expected to continue expanding as Taiwanese manufacturers accelerate the rollout of advanced production capacity to meet strong client demand. Export momentum is likely to persist, with merchandise exports forecast at US$1.0725 trillion (up 18.70% year-on-year) and imports at US$792.3 billion (up 15.23%). After adjusting for price changes, real growth in exports and imports is projected at 11.53% and 10.07%, respectively.

On the domestic demand side, strong corporate profits have boosted stock markets to record highs, while continued improvement in the labor market has enhanced household wealth and income. Auto market demand is rebounding as tariff impacts diminish, and financial market transactions remain active. As a result, real private consumption growth for 2023 is forecast at 4.76%, up 1.16 percentage points, with 2.81% growth expected in 2024.

Regarding private investment, domestic semiconductor, packaging and testing, memory, substrate, and equipment suppliers are aggressively expanding production capacity, leading to strong investment in factories and equipment. Real private investment growth for 2023 is projected at 11.58%, a significant upward revision of 5.15 percentage points.

On pricing, recent weather conditions and rising AI demand have increased costs for consumer electronics components, causing goods prices to rise at an accelerating pace. Service sector price increases are also expected to continue. Full-year CPI growth is forecast at 2.07%, up 0.14 percentage points from the previous estimate, with a slight decline to 1.90% projected for 2024.