TAIPEI (Taiwan News) — Taiwan’s Central Bank on Thursday highlighted five uncertainties facing the nation’s economy but raised its growth forecast for this year.
The bank now expects Taiwan’s economy to expand 4.55% in 2025, up from its June estimate of 3.05%. It projects growth of 2.68% for 2026, according to CNA.
However, the bank cautioned that economic performance will depend on five key factors:
- Unclear details of US trade policies
- Shifting monetary policies among major economies
- Global economic and inflationary uncertainties
- Structural challenges in China
- And the effectiveness of Taiwan’s own industrial support measures
While the US has outlined a framework for tariffs with major trading partners, details remain unsettled. Washington is also investigating semiconductors and information and communication technology products under Section 232 of the Trade Expansion Act, raising concerns over potential tariffs that could disrupt Taiwanese supply chains and drive up electronics prices.
Global monetary policies are also diverging. The US Federal Reserve has begun cutting rates in response to a cooling labor market, while China’s Central Bank continues to ease monetary policy to support growth.
The European Central Bank has paused rate cuts, and the Bank of Japan may raise rates if economic conditions improve. These moves could reshape global capital flows and affect stock, bond, and currency markets, the bank noted.
The Central Bank also pointed to challenges in China, including weak domestic demand and persistent exports of excess capacity, which are intensifying global competition and weighing on Taiwan’s exports.
Domestically, the effectiveness of government support measures will be crucial for stabilizing industries and the job market amid ongoing external risks, the bank said.
