Taiwan trims 2025 GDP growth forecast, cites US tariff uncertainty

TAIPEI, May 28 (Reuters) - Taiwan's trade-reliant economy is expected to grow at a slower pace in 2025 than previously forecast, as uncertainty over possible U.S. tariffs weighs on growth, the statistics agency said on Wednesday.

A semiconductor powerhouse that runs a large trade surplus with the U.S., Taiwan was facing duties of 32% on its U.S. imports until U.S. President Donald Trump paused tariffs for 90 days to allow negotiations to take place.

Taiwan's gross domestic product is now expected to rise 3.1% this year, the official forecast from the Directorate General of Budget, Accounting and Statistics showed, slightly lower than the 3.14% it forecast in February.

One main uncertainty is "the outcome of U.S. trade tariff negotiations with various countries that can have a far-reaching impact on the global economy, inflation, and supply chains," it said in a statement.

It also said that weak growth in consumption and domestic investments could contribute to slowing growth.

In April, the statistics agency unexpectedly said it would raise its full-year growth forecast to 3.6% on strong tech demand.

Taiwan is a key hub in the global technology supply chain for companies such as Apple AAPL.O and Nvidia NVDA.O, and home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, TSM.N.

The United States is Taiwan's second-biggest export destination after China.

Taiwan's exports this year are expected to grow by 8.99%, the agency said, upgrading a previous forecast of 7.08%.

GDP expanded by 5.48% in the first quarter, the statistics agency said, compared to a preliminary reading of 5.37%, and was the fastest rate of growth since the first quarter of 2024 when the economy expanded 6.64%.

The forecast for the consumer price index (CPI) was lowered to 1.88% from 1.94% previously.