TAIPEI (Taiwan News) — Morgan Stanley has raised its forecast for economic growth from 8.9% to 11.6%, which would be the highest in nearly 40 years.
The Wall Street bank also lifted the nation’s 2027 growth forecast from 4.7% to 7.5%, per UDN. Taiwan’s GDP grew 15.43% year over year in the first quarter and 12.92% in the second quarter, averaging 14.15% in the first half.
Morgan Stanley said the upgrade reflects strong AI-driven technology exports, increased semiconductor and supply-chain investment, and improving private consumption. Growth is no longer driven solely by net exports, with rising domestic investment and consumption showing that the AI and semiconductor boom is benefiting the broader economy.
Taiwan’s exports rose 44.7% year over year in the first seven months of the year, marking 33 consecutive months of annual growth, UDN reported. July exports rose 32.9%, while export orders jumped 61.9% to a record NT$3.11 trillion (US$97.9 billion), driven by demand for integrated circuits, electronic components, and information and communications technology products.
Morgan Stanley forecasts Taiwan’s exports will grow 20.7% for the full year, with shipment growth slowing from about 28% in the first half to about 13% in the second half. It said the slowdown mainly reflects a higher comparison base and shipment timing, with no clear signs yet of a meaningful downturn in the semiconductor cycle.
The report said semiconductor export growth may have peaked by the end of 2025, but the share and value of advanced chips in exports continue to rise, while global AI capital spending remains strong, per CNA. As a result, shipments of technology products and nominal exports are expected to remain resilient.
The bank forecasts the consumer price index will rise 2.1% in 2026 and 2.2% in 2027, with headline and core inflation likely to remain slightly above the Central Bank’s 2% threshold, per SET News. It cited fuel prices, weather-related food costs, higher technology prices amid the AI boom, recovering consumption, and elevated wage expectations as sources of inflationary pressure.
The report also noted that Taiwan plans to distribute another NT$10,000 cash payment to each person in 2027. If approved, the program could add about 0.3 percentage points to GDP growth, although the expansionary budget could also increase demand-driven inflation.
