Taiwan 2025 GDP growth forecast hits 15-year high on surge in AI demand

ReutersNov 28, 2025 9:50 AM

2025 GDP estimate raised to +7.37% vs previous +4.45%
2026 GDP estimate +3.54%
US tariffs seen clouding 2026 GDP outlook -agency
Central bank seen leaving interest rate steady -analyst
2026 exports seen at +6.32% y/y
2026 CPI projected at +1.61% y/y

By Faith Hung and Jeanny Kao

TAIPEI, Nov 28 (Reuters) - Taiwan's tech-heavy economy is expected to grow at its fastest pace in 15 years, riding the wave of demand for artificial intelligence (AI) technology, the statistics office said on Friday, though U.S. tariffs are likely to cloud the outlook next year.

Gross domestic product (GDP) is expected to expand by 7.37% this year, much better than the 4.45% pace it predicted in August and a level not seen since the 10.25% posted in 2010, said the Directorate General of Budget, Accounting and Statistics.

Taiwan plays a pivotal role in the global AI supply chain for companies such as Nvidia NVDA.O and Apple AAPL.O. Its position is anchored by the world's largest maker of chips used in AI applications, Taiwan Semiconductor Manufacturing (TSMC) 2330.TW, TSM.N.

"The growth beat expectations on strong demand for AI servers as US CSP (cloud service providers) continued to intensify their competition," said analyst Kevin Wang of Taishin Investment Advisory.

The agency, however, is cautious about the GDP growth outlook in 2026 over concerns about the impact of U.S. tariffs.

Taiwan's exports to the United States are subject to a 20% tariff, which Taipei is in talks to reduce, though semiconductors are currently excluded.

"Tariffs was not a big impact for this year, but it remains an uncertainty for next year," the agency said.

For 2026, the statistics office raised its GDP growth forecast to 3.54%, above its earlier projection of 2.81%.

The strong growth of the economy reinforces the view that Taiwan's central bank will leave interest rates unchanged in December, as most global central banks are taking a loose monetary policy, Wang said.

The statistics agency sees 2026 exports growing 6.32% on year. It forecast the 2026 consumer price index at 1.61%, which would be below the central bank's 2% target and slightly lower than the 1.64% forecast issued previously.

The agency also revised third quarter economic growth upwards to 8.21%, compared with a preliminary 7.64%.

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