By Jeanny Kao and Faith Hung
TAIPEI (Reuters) -Taiwan's trade-dependent economy grew faster than expected in the fourth quarter thanks to strong domestic consumption and a rebound in exports, expanding 1.4% for the full year of 2023.
Taiwan is a key hub in the global technology supply chain for companies such as Apple Inc (NASDAQ:AAPL) and home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).
Gross domestic product in the October-December period grew by a preliminary 5.12% from a year earlier, the statistics agency said on Wednesday, beating the 4.35% growth forecast by analysts in a Reuters poll.
Quarter-on-quarter, the economy expanded at a seasonally adjusted annualised rate of 8.79%.
GDP increased 2.32% year-on-year in the third quarter.
Domestic consumption has also bounced back well following the COVID-19 pandemic. Last week, restaurant chain Wowprime said it aims to hire some 400 new employees in the first quarter given booming demand.
"In the fourth-quarter, Taiwan was gradually turning back to the normal exports-driven growth track and private consumption remains at normal growth level, offsetting declines in investments," said analyst Chengyu Liu of First Capital Management.
Liu expected exports would rise by 4%-5% this year on an annual basis, citing growing demand sparked by artificial intelligence applications and a soft landing for the U.S. economy, and added Taiwan's GDP would likely expand 3.2% this year.
Taiwan's exports, a main driver of the island's economy, emerged from a year-long decline in September.
Fourth-quarter exports rose 3.4% year-on-year after contracting at a 5.1% annual rate in the third quarter, while the island's trade surplus leapt 131% year-on-year in the final three months of the year.
The full-year economic growth of 1.4% was the slowest pace in 14 years, slightly missing the statistics bureau's November forecast of 1.42%, and lower than the 2.45% growth for 2022.
The economy in China, Taiwan's largest export market, grew 5.2% year-on-year in the fourth quarter, picking up from 4.9% in the third quarter, but missing a 5.3% forecast in a Reuters poll.
Taiwan's statistics agency will provide revised figures for the fourth quarter a few weeks later, with more details and forward-looking forecasts.