Pedestrians at the Shi Lin Night Market in Taipei.
(Bloomberg) — Taiwan lifted its forecast for economic growth next year as exports continue to surge on AI demand.
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Gross domestic product is expected to expand 3.54% in 2026, according to a statement from the statistics bureau in Taipei on Friday. That compares with the previous forecast of 2.81% back in August. Exports were projected to grow 6.32% for the year, versus an earlier call of 2.19%.
The bureau also said the economy was expected to grow by 7.37% in 2025, compared to the previous forecast of 4.45%. The new figure would be the fastest expansion since 2010.
“As long as companies are building the AI infrastructure, demand for Taiwan’s tech products will continue to be there,” Tsai Yu-tai, head of statistics for the Directorate-General of Budget, Accounting and Statistics, said at a briefing.
The new estimates come as debate mounts over the business prospects for companies linked to the AI revolution. Earlier this month, Taiwan Semiconductor Manufacturing Co. reported its slowest monthly revenue growth in more than a year. The main chipmaker to AI leader Nvidia Corp. posted a 16.9% rise in sales for October, which did roughly track with the average analyst estimate.
Taiwan’s economy has benefited from roaring exports this year. In October, outbound shipments surged at the fastest pace since 2010, largely due to massive demand for the chips and servers powering AI. Shipments to the US skyrocketed 144.3% to a record — underscoring Taiwan’s key role in the tech supply chain as companies like Meta Platforms Inc. and OpenAI race to build AI infrastructure.
The statistics bureau also said GDP was expected to grow by 8.21% in the third quarter, versus its earlier estimate of 7.64%.
Bumki Son, economist at Barclays Bank Plc, described this forecast as “another big upside surprise.”
“This likely makes Taiwan the fastest growing economy in EM Asia in our coverage universe” for 2025, Son added.
Roaring tech exports have eased worries about US President Donald Trump’s trade war. Many analysts had worried that tariffs would hit Taiwan’s economy, especially in the second half of 2025 but since many tech goods have mostly been exempted from the duties, that hasn’t come to pass.
The Trump administration hit Taiwan with a 20% tariff rate on July 31 — a level that is higher than what the US has levied on South Korea and Japan. Officials in Taiwan have indicated they are trying to clinch a better deal with Washington but that has proven elusive so far.