Taiwan lifts 2025 growth forecast on robust AI demand

Taiwan lifts 2025 growth forecast on robust AI demand

Taiwan has revised its economic growth forecast for 2025 to 3.29%, a slight increase from the previous estimate of 3.26%, despite potential trade disruptions posed by the anticipated return of US President-elect Donald Trump.

The updated projection was announced by the statistics bureau in Taipei on Friday. The bureau also adjusted the growth expectation for 2024 to 4.27%, up from an earlier forecast of 3.9%.

The third-quarter growth for Taiwan was reported at 4.17% year-on-year, surpassing the government’s earlier estimate of 3.97%. These figures emerge as Trump’s potential policies cast uncertainty over Taiwan’s economic landscape, particularly due to the island’s significant trade relationships with both China and the United States.

This week, Trump has threatened to impose an additional 10% tariff on Chinese goods as a punitive measure for China’s purported failure to curb the flow of drugs into the US.

Taiwan’s economy has been among the top performers in Asia this year, buoyed by the global demand for its high-tech products. Leading AI companies such as NVIDIA (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and OpenAI are increasingly relying on Taiwanese firms for chip fabrication, server construction, and device cooling solutions.

The robust economic performance has enabled Taiwan’s central bank to maintain its benchmark interest rate at a 16-year high, increase the reserve requirement for banks, and implement measures to temper the overheated property market.

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