DBS Group Research economist Ma Tieying revises Taiwan\u2019s 2026 GDP growth forecast up to 11.6% from 9.4% and 2027 to 5.6% from 4.5%, noting that growth will exceed 10% and mark the strongest pace in more than three decades. The report highlights narrowing K-shaped divergence, balanced AI-driven prospects, and expects a gradual transition to steadier growth alongside a modest rate hike in late 4Q.<\/p>\n
DBS upgrades Taiwan growth outlook<\/p>\n
“We further revise up our 2026 GDP growth forecast to 11.6% from 9.4%\u2014our third upgrade this year\u2014and raise our 2027 forecast to 5.6% from 4.5%. Growth in 2026 would be the highest in more than three decades and only the second time since 2010 that Taiwan has achieved double-digit growth.”<\/p>\n
“We continue to expect AI-driven growth to transition from a supercharged pace toward a steady trajectory in 2H26-2027. The AI outlook remains balanced between structural optimism, driven by continued technological innovation, and cyclical caution, stemming from the external financing needs and electricity and regulatory constraints facing US hyperscalers.”<\/p>\n
“We expect the K-shaped pattern to continue narrowing through 2H26-2027. Domestic demand should receive further support from cumulative and sizeable wealth effects from the stock<\/a> market, stabilization in the property market, and steady wage and employment conditions.”<\/p>\n “We maintain our forecast for a 12.5bp rate hike in 4Q, bringing the policy discount rate to 2.125%. The central bank is expected to follow the DGBAS in upgrading its GDP<\/a> forecasts at the September meeting.”<\/p>\n “An immediate rate hike remains unlikely, as inflation pressure is not yet compelling and the November local elections are approaching. December is likely to be a more appropriate timing for a rate hike, as inflation would have remained above 2% for more than six months by then, while inflation expectations may be starting to rise and require anchoring.”<\/p>\n