TAIPEI (Taiwan News) — Taiwan Institute of Economic Research lowered Taiwan’s economic growth rate this year to 2.91% on Friday, down 0.51 points from its January forecast.

TIER said in a press release that March manufacturing exports and production, benefiting from AI demand, showed significant growth compared to February, per RTI. However, US tariff policies and unclear negotiated progress between countries have added to global economic uncertainty and lowered its economic forecast, per CNA.

TIER Macroeconomic Forecasting Center Director Sun Ming-te (孫明德) said a recent surge in rush orders has spurred production and procurement. This front-loading trend has heightened uncertainty for the second half of the year.

To preempt potential tariffs, Taiwanese firms have accelerated shipments and inventory buildup. This has temporarily boosted exports, manufacturing output, and export orders in the first quarter.

Sun said the 90-day tariff delay has introduced new volatility, as manufacturers are pulling forward demand. This may lead to a sharp drop in activity once early shipments subside.

However, TIER said it expects a slowdown in external demand later this year. Weaker global conditions and recent stock market losses are also weighing on consumer confidence.

Private investment growth was sharply revised down by 1.56 points to 4.10%, while private consumption was lowered to 1.97%. Inflation expectations remain unchanged, with consumer price growth forecast at 1.95%.

Sun warned that a downturn could threaten investment in data centers. Tech firms under financial pressure may scale back spending, potentially weakening Taiwan’s AI-driven momentum.

TIER President Chang Chien-yi (張建一) said the think tank cannot predict how Trump’s trade strategy will unfold. For now, the forecast assumes a 10% reciprocal tariff and a continued global slowdown, he added.