Taiwan's economy grew by 5.09% year-on-year in the second quarter of 2024, surpassing economists' expectations of 4.8%, driven by strong global demand for semiconductors and AI-related technologies. The growth reflects increased capital formation, which rose by 15.3%, as companies invested in equipment, construction, and intellectual property. Despite this positive performance, forecasts suggest a potential slowdown for the remainder of 2024, partly due to a high base of comparison from last year. The central bank has expressed concerns about inflation, leading to a cautious stance regarding future tightening measures. Additionally, Taiwan Semiconductor Manufacturing Co has raised its revenue growth projections, bolstering confidence in the AI sector's sustainability. Meanwhile, the Chinese economy continues to struggle, with manufacturing activity contracting for the fifth consecutive month, highlighting contrasting regional economic conditions.