TAIPEI (Reuters) - Taiwan's export-dependent economy grew at its quickest pace in over a year in the first quarter, data showed on Wednesday, suggesting rising momentum in developed economies and an improving outlook for the global tech sector.
The preliminary growth rate of 3.04 per cent in the three-months to March 31 also indicated that the island's economy may be able to weather a slowdown in China, its biggest market, as exports to the United States and Europe showed a heartening pick up.
Taiwan's economy, home to the world's biggest contract chipmaker and a crucial supply chain for major electronics brands, is often viewed as a bellwether for global growth and tech demand.
"What's eye catching was the strong contribution of net exports, which added 1.57 percentage points to the overall growth rate," said analyst of Raymond Yang with ANZ in Hong Kong.
The first quarter growth was the strongest since the last quarter of 2012, according to the Directorate General of Budget, Accounting and statistics, driven by a low-base of comparison, solid private consumption and a steady pick up in exports.
It was largely in line with a median forecast of 3.0 per cent in a Reuters poll and slightly ahead of the 2.95 per cent rate booked in the fourth quarter of 2013.
The signs for the rest of the year were positive, and backed the International Monetary Fund's view that an increase in output in richer nations will spur the global recovery.
March exports to the United States, Taiwan's no. 2 market, rose 10.3 per cent on-year, with shipments to Europe up 10 per cent - in both cases it was the strongest growth rate in a year.
The increase up in shipments provide a shot in the arm to Taiwan's economy, which is facing some uncertainty as growth in China continues to slow down this year..
On a sequential basis, GDP growth eased substantially to 1.1 per cent on-quarter, from over 7 per cent in the fourth quarter - due to weakness in domestic demand - which points to the need for the export sector to pick up the slack.