TAIPEI (Taiwan News) – The Taiwan Institute of Economic Research raised its forecasts for economic growth in 2025 to 3.42% and for inflation to 1.95%, reports said Friday.
The prediction by the think tank was the most optimistic so far, per CNA. It based its forecast for the gross domestic product on the positive evolution of consumption, investment, and exports.
The main element to worry about would be the central government budget cuts imposed by the opposition, the institute said. They might result in pressure on electricity rates to rise, fueling a new round of inflation.
In November, the think tank predicted 2025 growth at 3.15%. While from 2020 to 2023 the main pillars of growth were either domestic consumption or investments, at present, global demand for Taiwan products had joined those two to strengthen the stability of the country’s economy.
The optimism could move from AI and semiconductors to other sectors, including machinery and electronic parts. However, more traditional parts of the manufacturing sector were still suffering under China’s economic slowdown. The institute predicted exports would rise 6.05% this year, or 1.37% more than mentioned in its November forecast.
Earlier, another prominent think tank, the Chung-Hua Institution for Economic Research, predicted growth for 2025 at 3.22% and inflation at 1.93%.