TAIPEI (Taiwan News) — US financial think tank and credit rating agency Fitch Ratings said Thursday (Aug. 22) that Taiwan’s economic growth rate is expected to reach 4% this year.

At a press conference held on Thursday (Aug. 22), Fitch Ratings Head of Asia-Pacific Sovereigns Thomas Rookmaaker said Taiwan has benefited from the rapid growth of AI, which has driven exports of high-tech products, per UDN.

Rookmaaker said that next year’s GDP growth rate might slow to 2.7%, which is still considered robust, per CNA. Although export growth is unlikely to maintain its high pace, the momentum from AI product exports and investments is expected to continue supporting growth, he added.

Fitch Ratings Senior Analyst Jenny Huang (黃筱婷) added that Taiwan’s traditional industries are facing significant challenges. These include pressure on capital due to the energy transition, risk of oversupply caused by weak demand from China, and potential risks in U.S. trade policies.

Huang explained that Donald Trump’s team has proposed increasing tariffs, primarily targeting China. However, based on previous experience from the US-China trade war, most of the costs could be borne by US consumers and importers, she added.

Although Taiwan is not the primary target of these policies, its reliance on US trade could still result in a significant economic impact, Huang warned.