Taiwan’s economy is projected to approach a growth rate of nearly 6% this year, based on the unexpectedly strong performance observed in the third quarter. This positive momentum is attributed to the nation’s benefits from the burgeoning artificial intelligence (AI) sector.
The export-driven economy of Taiwan has absorbed substantial demand within the critical semiconductor and technology industries, largely owing to AI developments, thereby offsetting the adverse effects of the 20% tariff on exports to the United States imposed during the Trump administration.
According to data from the Directorate-General of Budget, Accounting and Statistics, Taiwan’s gross domestic product (GDP) expanded by 7.64% year-on-year in the July-September quarter. This surpasses the 6.0% growth forecasted by economists polled by Reuters and paves the way for raising the comprehensive annual growth forecast to exceed 5%, as announced last month.
Directorate-General of Budget, Accounting and Statistics Minister Chen Shu-tzu informed lawmakers that the economy could grow by more than 5.5%, potentially approaching 6% this year. Initially, the agency anticipated a mere 1% growth in GDP for the third quarter; however, the actual figure reached 7.64%, prompting an upward revision of the annual forecast, she explained.
Taiwan serves as a pivotal hub within the global technology supply chain, supporting giants such as Nvidia and hosting the world’s largest contract semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), whose semiconductors are extensively utilised in AI applications. Discussions with Washington regarding the reduction of tariffs continue, with efforts focused on excluding semiconductors from these tariffs.
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A formal announcement of the final economic forecast for 2025, along with an updated projection for 2026, is scheduled for November 28.
