Taipei: Taiwan's economy expanded 13.69 percent in the first quarter of this year, the fastest growth rate since 1987, fueled by soaring demand for AI-related exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said Thursday.

According to Focus Taiwan, gross domestic product (GDP) from January to March expanded 13.69 percent from a year earlier, based on preliminary DGBAS estimates. This was 2.23 percentage points higher than the budget office's last forecast in February. The better-than-expected economic growth was driven by surging exports, which in turn boosted domestic manufacturing and investment, DGBAS specialist Chiang Hsin-yi told reporters.

A cash handout program launched by the government late last year, along with increased spending spurred by stock market investment gains, also led to strong consumer spending, Chiang said.

In a press release, the DGBAS stated that real exports of goods and services, adjusted for inflation, grew by 35.25 percent in the first quarter, driven by AI and related infrastructure. Imports also rose by 27.07 percent during the same period, as many manufacturers stocked up on raw materials and capital equipment, the agency said.

Real private consumption expanded by 4.89 percent year-on-year during the first quarter. Meanwhile, gross capital formation, or total investment, reached 5.20 percent, amid increased investments in machinery equipment, intellectual property products, and transport equipment, according to the DGBAS.

When asked by reporters about the potential economic impact of the Iran war, which began in late February and has led to a surge in oil prices, Chiang mentioned that it is being monitored, but the impact has been limited so far. While there could be some effect on Taiwan's traditional manufacturing sector, the economic data for March did not clearly reflect any impact from the war, Chiang noted.