Taiwan GDP growth forecast hits 15-year high on surge in AI demand

Taiwan’s tech-heavy economy is expected to grow at its fastest pace in 15 years, riding the wave of demand for artificial intelligence (AI) technology, the statistics office said on Friday, though US tariffs are likely to cloud the outlook next year.

Gross domestic product (GDP) is expected to expand by 7.37% this year, much better than the 4.45% pace it predicted in August and a level not seen since the 10.25% posted in 2010, said the Directorate General of Budget, Accounting and Statistics.

Taiwan plays a pivotal role in the global AI supply chain for companies such as Nvidia and Apple. Its position is anchored by the world’s largest maker of chips used in AI applications, Taiwan Semiconductor Manufacturing (TSMC).

“The growth beat expectations on strong demand for AI servers as US CSP (cloud service providers) continued to intensify their competition,” said analyst Kevin Wang of Taishin Investment Advisory.

The agency, however, is cautious about the GDP growth outlook in 2026 over concerns about the impact of US tariffs.

Taiwan’s exports to the United States are subject to a 20% tariff, which Taipei is in talks to reduce, though semiconductors are currently excluded.

“Tariffs was not a big impact for this year, but it remains an uncertainty for next year,” the agency said. For 2026, the statistics office raised its GDP growth forecast to 3.54%, above its earlier projection of 2.81%.

The strong growth of the economy reinforces the view that Taiwan’s central bank will leave interest rates unchanged in December, as most global central banks are taking a loose monetary policy, Wang said.

The statistics agency sees 2026 exports growing 6.32% on year. It forecast the 2026 consumer price index at 1.61%, which would be below the central bank’s 2% target and slightly lower than the 1.64% forecast issued previously.

The agency also revised third quarter economic growth upwards to 8.21%, compared with a preliminary 7.64%.

Meanwhile Taiwan’s exports grew at their fastest clip in nearly 16 years in October, setting a record as booming demand for chips and artificial intelligence (AI) technology outpaces the effects of US tariffs on the island’s goods.

Exports jumped 49.7% in October from a year earlier to $61.80 billion, a record amount in dollars and the fastest growth since 57.7% logged in May 2010, the finance ministry said on Friday.

The figure easily surpassed the 31.6% increase forecast by economists in a Reuters poll.

It also marked the 24th consecutive monthly year-on-year gain.

Taiwan’s exports to the United States are subject to a 20% tariff, which Taipei is in talks to reduce, though semiconductors are at present excluded.

Taiwan’s export momentum is expected to be buoyed both by the continued acceleration of AI and high-performance computing applications and the traditional peak season of year-end shopping in western markets, the ministry said in a statement.

The ministry now expects 2025 exports to grow 30% year-on-year to $600 billion.

However, the global economic outlook remains highly uncertain, as US tariff policies take shape and geopolitical risks linger, so there is need for careful monitoring, the statement added.

Taiwan companies such as TSMC,, the world’s largest contract chipmaker, are major suppliers to Nvidia, Apple and other tech giants.

For November, the ministry expects exports to rise between 35% and 40% year-on-year.

In October, Taiwan’s exports to the United States soared 144.3% on-year to $21.135 billion, while exports to China climbed 3.2%.

Exports of electronic components rose 27.7% to $21.16 billion, with semiconductor exports up 29.2%.

Imports rose 14.6% to $32.22 billion, behind economists’ forecasts for an increase of 25.3%.

Meanwhile Taiwan has sharply raised its economic growth forecast for 2025 to 7.37 per cent, the fastest rate in 15 years, as roaring demand for artificial intelligence continues to boost its electronics exports.

Real GDP increased 8.21 per cent in the third quarter compared with the same period last year, driven by a 32 per cent jump in exports mainly due to demand for AI and consumer electronics, the cabinet’s statistics agency said.

The economy’s expansion in the three months to September 30 was 0.6 percentage points higher than forecast a month ago.

It marks the strongest quarterly growth since the second quarter of 2021, during the pandemic, when soaring purchases of computers by families under lockdown and a global semiconductor shortage boosted Taiwan’s electronics exports.

Under the new full-year forecast, Taiwan’s economy would grow faster than China’s, rare for a developed economy. It would be the highest rate since 2010, when the rebound from the global financial crisis boosted GDP growth to more than 10 per cent.

Agencies