TAIPEI (Taiwan News) — The Chung-Hua Institution for Economic Research on Wednesday sharply raised its 2026 economic growth forecast to 10.35%, citing stronger-than-expected exports driven by AI, semiconductors, and high-performance computing.
The revised forecast is 3.13 percentage points above its April projection, making CIER the second major domestic research institute, after Academia Sinica’s Institute of Economics, to predict Taiwan’s economy will expand by more than 10% this year, per a CIER press release.
CIER said exports and business investment are expected to remain strong as manufacturers continue expanding capital expenditures to increase production capacity. The institute added that rising stock prices have created a wealth effect supporting consumer spending, making Taiwan one of the few economies maintaining robust growth despite global uncertainty.
Despite the strong outlook, CIER warned that conflict in the Middle East has pushed up global oil prices, increasing inflationary pressure. It forecast Taiwan’s Consumer Price Index will rise 2.02% this year, slightly exceeding the government’s 2% inflation warning threshold.
The institute said inflation risks remain tied to international energy prices, geopolitical tensions, and global supply chain costs. However, it said the government’s price stabilization measures should help ease the impact of higher living costs on consumers.
Looking ahead, CIER forecast Taiwan’s economic growth will moderate to 3.71% in 2027, while annual CPI growth is expected to fall to 1.89%, per the press release.
CIER President Lien Hsien-ming (連賢明) attributed the stronger outlook primarily to surging exports, saying Taiwan’s total merchandise exports could exceed US$900 billion this year if current trends continue, per CNA.
Lien said this year’s economic momentum is no longer being driven solely by external demand, as domestic demand has also strengthened. CIER estimates domestic demand will contribute 4.73 percentage points to economic growth this year, while net external demand will account for 5.62 percentage points.
Addressing concerns over inflation, Lien said developments in the Middle East will be a key factor. If the regional conflict ends quickly, the impact on Taiwan’s prices is likely to be limited.
A prolonged conflict, however, could lead to greater inflationary pressure, Lien said.
CIER also forecast the New Taiwan dollar will average about NT$31.5 against the US dollar this year. Lien said exchange rate movements will depend on developments in the Middle East and future interest rate decisions by the US Federal Reserve, both of which warrant close monitoring.
