TAIPEI (Taiwan News) — Swiss investment bank UBS raised its forecast for Taiwan's 2026 economic growth to 11%, up from 9.9%, marking the country's fastest annual GDP growth since 1987.
In its latest Asia-Pacific Economic Outlook report, UBS said it upgraded its forecast due to continued strength in exports and expanding corporate capital expenditure. It added that spillover effects from surging AI demand would benefit the overall economy, per UDN.
William Deng (鄧維慎), a senior economist for Asia at UBS, said Taiwan's export performance continues to exceed expectations while business investment remains on an upward trajectory. He said official second-quarter GDP government data is scheduled to be released on Friday and is expected to exceed 10% year over year.
Despite a higher comparison base in the second half of the year, he said sustained economic momentum should keep full-year GDP growth in double digits. Deng said Taiwan's exports accelerated in the second quarter compared with the first and have remained strong since July.
He added that export growth is expected to continue through the second half of the year, although monthly fluctuations are likely. Imports of capital goods have also reached record highs in recent months, reflecting robust corporate investment demand with no clear signs of slowing in the near term, he said.
Deng added that the AI boom is beginning to benefit industries beyond technology. Traditional sectors, including metals and machinery, are seeing improved business conditions as AI-related investment spreads across the broader economy.
Consumer spending has also strengthened. After adjusting for fuel costs and inflation, retail sales growth has accelerated to multi-year highs. UBS said the improvement is likely driven by rising household incomes and a wealth effect stemming from the AI-driven economic expansion.
Taiwan's public finances have also benefitted from the AI boom, Deng said. Preliminary data show total tax revenue rose 82% year over year in the first half of 2026. He said government revenue has also been boosted by strong profits at technology companies, rising household income, and higher securities transaction tax receipts, per UDN.
