Taiwan 2025 GDP growth forecast hits 15-year high on surge in AI demand
A view of the Taipei skyline with clouds hanging over distant mountains, seen from across the Tamsui River in Taipei, Taiwan, November 8, 2025. REUTERS/Ann Wang
TAIPEI :Taiwan's tech-heavy economy is expected to grow at its fastest pace in 15 years, riding the wave of demand for artificial intelligence (AI) technology, the statistics office said on Friday, though U.S. tariffs are likely to cloud the outlook next year.
Gross domestic product (GDP) is expected to expand by 7.37 per cent this year, much better than the 4.45 per cent pace it predicted in August and a level not seen since the 10.25 per cent posted in 2010, said the Directorate General of Budget, Accounting and Statistics.
Taiwan plays a pivotal role in the global AI supply chain for companies such as Nvidia and Apple. Its position is anchored by the world's largest maker of chips used in AI applications, Taiwan Semiconductor Manufacturing (TSMC).
"The growth beat expectations on strong demand for AI servers as US CSP (cloud service providers) continued to intensify their competition," said analyst Kevin Wang of Taishin Investment Advisory.
The agency, however, is cautious about the GDP growth outlook in 2026 over concerns about the impact of U.S. tariffs.
Taiwan's exports to the United States are subject to a 20 per cent tariff, which Taipei is in talks to reduce, though semiconductors are currently excluded.
"Tariffs was not a big impact for this year, but it remains an uncertainty for next year," the agency said.
For 2026, the statistics office raised its GDP growth forecast to 3.54 per cent, above its earlier projection of 2.81 per cent.
The strong growth of the economy reinforces the view that Taiwan's central bank will leave interest rates unchanged in December, as most global central banks are taking a loose monetary policy, Wang said.
The statistics agency sees 2026 exports growing 6.32 per cent on year. It forecast the 2026 consumer price index at 1.61 per cent, which would be below the central bank's 2 per cent target and slightly lower than the 1.64 per cent forecast issued previously.
The agency also revised third quarter economic growth upwards to 8.21 per cent, compared with a preliminary 7.64 per cent.
