TAIPEI (Taiwan News) — Taiwan Ratings Corporation on Thursday raised its economic growth forecast for Taiwan from 6.3% to 8.2%, citing strong AI-driven demand.
The S&P Global Ratings subsidiary said at its midyear outlook conference that stronger-than-expected exports and domestic demand have lifted growth prospects, per CNA. Taiwan Rating analyst Tsai Yi-chun (蔡怡君) said expansion in global IT spending continues to support Taiwan’s tech sector, with momentum expected through the second half of the year.
Tsai said Taiwan Ratings expects GDP growth to slow to 2.2% next year and 2.4% in 2028. The agency forecasts the Taiwan dollar will average NT$31.5 (US$1) against the US dollar this year before stabilizing at around NT$31 over the next three years.
On inflation and monetary policy, Taiwan Ratings expects consumer price growth to reach 1.7% this year, 1.4% next year, and 2.4% in 2028. Taiwan Ratings Senior Director Chang Shu-ping (張書評) said the central bank’s policy rate is expected to remain at 2% through the end of the year and stay relatively stable in the coming years compared with other economies.
However, Tsai warned that Taiwan’s growing reliance on AI-related exports has created new vulnerabilities. A sharp reassessment of AI demand or returns could pressure technology stocks, trigger capital outflows, weaken exchange-rate stability, and hurt investor confidence.
Taiwan Ratings also highlighted risks from global uncertainty, including possible market volatility from Middle East tensions, higher debt costs from tighter monetary policies, and weakness in China’s property market, per UDN. Tsai said energy and climate-related disruptions could further increase pressure on businesses.
The agency said companies should also prepare for longer-term structural challenges, including rising geopolitical tensions, deeper technology fragmentation driven by AI development, and climate change. Extreme weather events and the global energy transition could increase operating costs and create additional challenges for Taiwanese businesses.
