TAIPEI (Taiwan News) — The Chung-Hua Institution for Economic Research (CIER) on Friday raised Taiwan’s full-year GDP forecast to 5.45% amid robust AI demand and exports.
CIER’s upward revision from July’s 3.05% estimate marks the first domestic projection above 5%, reflecting a balance between domestic consumption and external demand, per CNA. CIER President Lien Hsien-ming (連賢明) called the growth better than expected, echoing TSMC’s recent optimism, while noting cautious vigilance over tariff risks.
Early pull-forward demand during the US tariff buffer period and a global AI-driven semiconductor boom fueled first-half growth to 6.75%, including 8.01% in Q2. With AI momentum continuing, Q3 growth is expected to be at 5.82%, though Q4 could slow to 2.71% due to high base effects.
Inflation is expected to ease over the year, with the consumer price index forecast at 1.81%. The NT dollar is projected to strengthen to around NT$29.95 (US$0.98) by Q4, averaging NT$30.91 for 2025, up roughly 3.88% from last year.
CIER noted that earlier caution from the government and think tanks stemmed from US tariffs and global supply chain volatility. However, the tariff buffer, easing measures from trade talks, and pull-forward demand have boosted global trade, prompting repeated upward revisions.
Taiwan’s exports in the first three quarters remained strong, while imports grew steadily due to investment-linked and export-driven demand. CIER projects export growth this year at 26.59% and import growth at 27.30%, with private investment expected to rise 11.58% as AI-driven corporate spending surges.
Domestic consumption retains steady momentum, with Q3 and Q4 benefiting from stock market wealth effects and supporting 1.56% annual growth. Lien said potential trade talks at the APEC meeting may clarify Taiwan-US negotiations, though tensions are likely to fluctuate.
Looking ahead, tariff uncertainties remain but CIER maintains cautious optimism. Extreme scenarios like sharply higher US tariffs or Chinese rare-earth restrictions are considered low probability, while next year’s growth is projected at a solid 2.55%.
