TAIPEI (Taiwan News) — Yuanta Securities Investment Consulting Co. (元大投顧) has raised its forecast for Taiwan's economic growth this year to 11.05%, citing robust AI-driven demand, strong exports, and rising investment.
The firm increased its full-year GDP forecast from 8.72%, which it issued in March, saying Taiwan continues to benefit from its central role in the global AI supply chain. Yuanta's projection exceeds the Central Bank's June forecast of 9.45% and the government's official statistics bureau's June forecast of 9.64%, making it the highest GDP forecast issued by any domestic or foreign financial institution, per Liberty Times.
Although Taiwan's housing market has yet to stabilize, Yuanta said rising AI investment and inventory replenishment are boosting private investment. Strong corporate earnings have also supported Taiwan's stock market, generating a wealth effect that has encouraged consumer spending, per a Yuanta report issued on Thursday.
The firm added that stable employment, rising wages, and a rebound in automobile purchases indicate resilient private consumption. Together with exports, capital investment, and stock market gains, these factors are expected to continue supporting economic growth.
Looking ahead to 2027, Yuanta forecasts GDP growth of 6.18%. The firm noted that, because the central government's budget has yet to be approved, its estimates of government consumption, public investment, and government capital spending remain conservative, leaving room for upward revisions, per Liberty Times.
Yuanta also said Taiwan's export base has become more diversified compared with the second half of last year. While electronics and information and communications technology products continue to benefit from AI demand, the firm said traditional industries are also showing signs of recovery, supported by improving US import demand.
The main downside risk, according to Yuanta, is the economy's increasing pace of expansion. The National Development Council's business climate monitor last week flashed a red signal for the sixth consecutive month, indicating the economy may be overheating. Despite that concern, Yuanta said the outlook for Taiwan's economy in the second half of the year remains positive.
