TAIPEI (Taiwan News) — Fitch Ratings on Tuesday raised its forecast for Taiwan’s economic growth this year to 9.4%.
At a media briefing, the credit rating agency also raised Taiwan’s 2027 growth forecast to 4.8%, from 4%, per CNA. It said continued investment and robust demand for AI-related products are expected to keep Taiwan among the region’s strongest-performing economies.
Fitch Ratings Asia Pacific Sovereigns Director Sagarika Chandra said Taiwan’s AA sovereign rating with a stable outlook reflects its strong external balance sheet, prudent fiscal management, and competitive business environment, per Wealth Magazine. However, she said Taiwan’s export-oriented economy remains vulnerable to external shocks and cross-strait tensions.
Chandra said exports to Taiwan’s two largest markets, the US and China, rose 69% and 22%, respectively, in the first half of this year. She added the nation’s advanced manufacturing base and specialized semiconductor ecosystem will continue supporting exports and economic growth.
However, Fitch identified three main downside risks to the outlook: a sharp slowdown in growth among Taiwan’s major trading partners, weaker global demand for AI, and rising geopolitical tensions, per UDN. It added that while China’s semiconductor industry continues to develop rapidly, it has not yet hurt Taiwan.
Fitch also warned that high energy costs remain a challenge despite expectations that oil prices will ease next year. It said Taiwan’s utilities continue to face financial pressure from elevated fuel costs, while further electricity price increases could squeeze profit margins for petrochemicals, steel, textile fibers, and retail.
