(Bloomberg) -- Taiwan projects its economy will rebound swiftly this year from a lackluster 2023 as surging global demand for artificial intelligence-related technologies fuels growth.

Gross domestic product will likely expand 3.43% in 2024, the statistics bureau said in a statement Thursday. That would be the fastest rate of annual growth since 2021, and compared with an earlier forecast of 3.35% set in November. Officials estimate growth in the current quarter will reach 5.92%, the strongest quarterly expansion since the second period of 2021. 

The strong outlook represents expectations for a rapid turnaround from last year. GDP expanded 1.31% — the slowest growth since 2009 — due to a larger-than-expected drop in exports and investment. Thursday’s statement pointed to a global recovery in end-user demand for tech products, the rising use of AI technologies and a rebound in tourism travel to Taiwan as the key reasons for their more bullish outlook. 

Factory-floor data out earlier Thursday bolster the case for a rapid recovery. Industrial production in January rose 15.98% year on year, the biggest gain since July 2021. Economists had forecast a 10.9% rise.  

Taiwan Semiconductor Manufacturing Co.’s spending plans for the year highlight the renewed optimism. Taiwan’s largest company has budgeted between $28 billion and $32 billion in capital expenditure in 2024, compared to about $30 billion last year. The company has said revenue growth is likely to bounce back to at least 20% this year. 

Officials did raise did concern over how much of TSMC’s planned capex will be spent at home rather than overseas. The company opened a new chip fabrication facility in Japan last week and is on track to start mass production later this year. The company is also building a new fab in Arizona and plans to start construction a new plant in Germany later this year. 

The statistics bureau sees exports growing 6.14% this year, down from its previous forecast of 6.3% made in November.

Inflation has been a persistent issue for the government over the past year. While mild by global standards, the consumer price index has hovered around 3% for much of the past two years. Officials see the figure coming back down to 1.85% this year.

--With assistance from Philip Glamann.

(Updates with chart, more details on TSMC.)

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