TAIPEI (Taiwan News) – The government estimates Taiwan’s gross domestic product will grow 4.45% this year, instead of the 3.10% it predicted in May.
Early forecasts by think tanks this year questioned whether the economy would achieve the 3% expansion the government set as a target. However, now it has become clear that Taiwan’s exports have continued to perform strongly due to demand for AI products, and despite the threat of US tariffs, predictions rose to over 3%.
The Directorate General of Budget, Accounting and Statistics said its latest preliminary estimate put growth during the second quarter at 8.01%, with a revision for the first quarter from 5.48% to 5.45%. Strong overseas demand for products from Taiwan’s AI sector and emerging technology applications boosted the country’s export performance.
The impact of US tariffs on semiconductors is expected to be offset, at least partly, by leading exporters of electronic components and AI server-related products, and their plans to expand production capacity in the US. The directorate general expects real exports of goods and services to grow 23.74% in 2025.
Private investment was higher than initially expected, though private consumption was revised lower, partly because of hesitation among consumers due to tariffs targeting automobiles. The consumer price index for the year is likely to reach 1.76%, or 0.12% lower than the forecast before, due to declining oil prices and currency appreciation.
Looking ahead to next year, the government sees economic growth at 2.81%, while inflation is expected to decline to 1.64% amid falling commodity prices and stabilizing prices in the service sector.
