Taiwan's economy is racing ahead at a blistering pace on the back of a semiconductor export boom. With an 8% range economic growth rate in the second quarter of this year, projections suggest it will surpass Korea in per capita gross domestic product (GDP) for the first time in 22 years. Technology corporations leading the global artificial intelligence (AI) boom are serving as the key engine driving Taiwan's economic growth.
According to Taiwan's statistics agency on the 14th, Taiwan's real GDP in the second quarter of this year jumped 8.01% from the same period a year earlier. It is the highest since the second quarter of 2021. Reflecting this rapid growth, the agency sharply raised its full-year real GDP growth forecast from 3.10% to 4.45%.
Accordingly, Taiwan's per capita GDP this year is expected to reach $38,066, surpassing Korea ($37,430). If the forecast materializes, the rankings will be reversed for the first time in 22 years since 2003.
Taiwan has also grown more likely to reach the "$40,000 per capita GDP" milestone next year for the first time ever. Taiwan's statistics agency projected that next year the country's per capita GDP will reach $41,019.
Korea, by contrast, has lost momentum. The real GDP growth rate in the second quarter of this year was 0.6% year over year, showing a large gap with Taiwan. The government projects growth this year and next will fall below the potential growth rate.
Experts worry the gap between the two countries could widen further. In semiconductors and AI, Taiwan's technology corporations are solidifying their competitiveness while aggressively increasing domestic investment.
Nomura Securities said, "Taiwan's tech corporations that play a pivotal role in the global AI boom are also investing aggressively at home," and noted, "Taiwan's potential growth rate is highly likely to exceed 3%."