'Taiwan's 'AI Boom' Expected to Drive 11% Growth This Year... Highest Since 1988'
Growth Forecast Raised by 3.34 Percentage Points in Six Months
Annual Growth Rate Projected to Remain Above 6% Next Year
Driven by the booming artificial intelligence (AI) industry, Taiwan's economy is projected to grow by over 11% this year. As global investment in AI infrastructure expands, boosting both exports and private investment—especially in the semiconductor sector—growth forecasts for this year continue to be revised upward.
Taiwan's Directorate General of Budget, Accounting and Statistics (DGBAS) announced on August 14 that it expects the country's GDP to grow by 11.05% this year. This figure is 1.41 percentage points higher than the 9.64% forecast released in May.
If these projections hold, Taiwan will achieve its highest economic growth rate since 1988. Following an 8.76% expansion last year, the country is now expected to reach double-digit growth in 2026.
This sharp rise in Taiwan's economic growth is being driven by demand related to AI. The DGBAS notes that stronger-than-expected global demand for building AI infrastructure is fueling not only exports and private investment but also robust consumption.
In fact, Taiwan’s authorities have repeatedly revised their growth forecasts upward this year. The estimate was raised from 7.71% in February to 9.64% in May (an increase of 1.93 percentage points), and now again to 11.05%. Over the past six months, the projection has climbed by 3.34 percentage points.
Strong growth is expected to continue in the second half of the year. The DGBAS forecasts 8.27% economic growth for the second half of the year, with annual growth in 2027 projected at 6.04%.
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However, external factors such as instability in the Middle East, fluctuating energy prices, and U.S. tariff policies are cited as risk factors. Whether global corporations will maintain their current level of investment in AI is also identified as a key variable that could significantly influence Taiwan's future economic growth.
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