TAIPEI (Taiwan News) — Taiwan’s December economic indicator showed a “red” light for the first time in nearly a year, the National Development Council said Tuesday.
The National Development Council said the comprehensive score for December reached 38 points, up one from November, shifting the signal to an overheated red, per CNA.
Breaking down the nine components, industrial and service-sector overtime hours rose to yellow-red due to AI-driven demand, while the manufacturing business climate index edged up to green. Wholesale, retail, and catering revenues fell to yellow-red, weighed down by postponed Lunar New Year purchases.
The red light was the first red signal since December 2024, following a shallow U-shaped trend over the past year. The indicator dipped to stable green from May to August 2025 after US tariff announcements shook business confidence.
AI demand repeatedly pushed Taiwan’s exports to record highs, helping the overall indicator recover to yellow-red by September and then red in December. NDC Department of Economic Development head Chen Mei-chu (陳美菊) said major global cloud service providers plan a 40% increase in capital expenditures this year, supporting Taiwan’s tech-driven growth.
Chen said the combination of strong AI demand and settled tariffs has prompted business optimism, with both foreign institutions and domestic think tanks revising Taiwan’s 2026 economic growth forecast above 4%.
The NDC cited four uncertainties that could affect growth: US trade policy, divergent monetary policies in major economies, potential trade friction from China’s domestic measures and global responses, and whether AI investments will deliver profits as expected.
Despite these risks, Chen remained positive, saying settled tariffs have eased uncertainty, traditional industries are recovering and surveys show improved business sentiment. She said she expects January to maintain at least a yellow-red signal, keeping economic momentum steady into the new year.
