Citing data from the island's Directorate General of Budget, Accounting and Statistics, known as DGBAS, Focus Taiwan reported on October 30 that Taiwan's economy grew an estimated 14.36% from a year earlier in the third quarter, the quickest pace recorded for that quarter in 48 years. That reading topped the August estimate from the agency by 2.94 percentage points.

Expansion has now reached double digits for four straight quarters, with appetite for artificial intelligence (AI) hardware buoying the island's electronics exports. The statistics agency estimates that the economy grew 14.22% across the first three quarters, its best performance for those nine months in 50 years.

DGBAS specialist Chiang Hsin-yi said exports and business investment powered the surge, and each came in stronger than anticipated. She said robust demand linked to cloud services, AI applications and high-performance computing boosted foreign sales, and bigger orders for the electronic parts that go into new consumer gadgets also contributed. Higher prices for goods shipped abroad lifted the value of exports as well, she added.

Chiang said real investment and inventory changes likely rose 26.36% in the quarter, beating the previous projection by 4.26 percentage points. According to the DGBAS, imports of capital equipment in Taiwan-dollar terms surged 58.5% year on year, including a 35.66% increase in semiconductor equipment. Outlays on construction, intellectual property, transportation equipment and machinery were higher too.

Chiang said industries outside electronics and information and communications technology also posted double-digit export growth. She described this as evidence that traditional sectors have been gradually recovering over recent quarters.

Demand at home remained solid. The DGBAS said real private consumption grew 5.37%, exceeding the forecast made in August by 0.01 percentage points and marking a second consecutive quarter of growth above 5%. Chiang credited a recovery in the car market and the wealth effect of the Taiwan stock market hitting record highs.

The last time Taiwan maintained a similar stretch of double-digit expansion was in 1986-87, Chiang said. Back then, the economy grew quickly for six quarters in a row while the government eased capital controls and foreign exchange restrictions step by step, a process that helped liberalise the economy and boost activity.