TAIPEI (Taiwan News) — Taiwan is on track to surpass a record NT$1.26 million (US$40,000) in per capita GDP this year, yet economists warn that industrial divergence and population decline could limit the benefits for workers, CNA reported Saturday.

The Directorate-General of Budget, Accounting, and Statistics (DGBAS) revised last year’s real GDP to 7.37%, its highest in 15 years, driven largely by demand for AI. Economic expansion is projected to moderate to 3.54% this year.

Taiwan’s per capita GDP has accelerated sharply over the past decades. It took 20 years to climb from NT$316,000 in 1992 to NT$632,000 in 2011. After this, it only took six years to rise from NT$958,000 to nearly NT$1.26 million.

Negative population growth and exchange rate effects have also pushed figures higher. Taiwan’s population has been shrinking since 2020, briefly rebounding in 2023 but resuming the decline in 2024. DGBAS Department of Statistics head Tsai Yu-tai (蔡鈺泰) said a smaller population denominator raises per capita GDP in country comparisons.

Despite rapid GDP growth, economic benefits remain concentrated. National Central University Professor Wu Ta-jen (吳大任) noted that over 7 million of Taiwan’s 11 million workers are in the service sector, which has little direct link to exports. In contrast, only about 300,000 are in semiconductor jobs, with roughly 1 million in the broader electronics sector.

Wu warned that Taiwan’s K-shaped industrial divergence is intensifying, with high-tech exports thriving while service and traditional sectors lag. He urged government action to create business opportunities and boost domestic demand, especially for low-wage service workers.

National Development Council Deputy Minister Kao Shien-quey (高仙桂) said the government is pursuing a three-pronged approach: maintaining Taiwan’s lead in AI and semiconductors, upgrading traditional industries and service sector with AI, and expanding finance and tourism.