SIMIC

Taipei increased its full-year estimate for gross domestic product to 5.46 per cent from a previous projection of 4.64 per cent. It also raised its estimate for first-quarter GDP growth to 8.92 per cent - the fastest pace in over a decade - compared with 8.16 per cent previously.

This year's rosy outlook will increasingly depend on Taiwan's ability to keep factories running at full steam despite Covid lockdown measures. A global shortage of computer chips produced by the likes of Taiwan Semiconductor Manufacturing has so far bolstered exports and GDP growth.

"If Taiwan's Covid situation can be brought under control by end-June, the economic hit is likely to be concentrated in the services sector," Angela Hsieh, an economist at Barclays Bank in Singapore.

"One very important point to look out for is whether or not manufacturing activities suffer any disruption."

Ms Hsieh downgraded her initial full-year GDP forecast by 50 basis points to 6.1 per cent but warned that Taiwan's slow roll-out of vaccines leaves it vulnerable to renewed outbreaks.