The economy is expanding faster than expected and could grow about 5 percent this year, buoyed by robust exports driven by global demand for artificial intelligence (AI), the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
DGBAS Minister Chen Shu-tzu (陳淑姿) told lawmakers at a meeting of the Legislative Yuan’s Finance Committee that the government’s forecast of 4.45 percent growth for this year “might have been somewhat underestimated,” citing stronger-than-expected export momentum.
“There is indeed room for further upward adjustment, as exports have continued to perform,” Chen said. “The earlier forecast was likely conservative.”
Photo: CNA
The comments came after the Asian Development Bank raised its projection for Taiwan’s GDP growth to 5.1 percent, the strongest in the region.
The DGBAS upgraded its forecast in August from 3.1 percent to 4.45 percent, but it said later that the economy is tracking even higher.
Exports in the first nine months of the year rose 29.7 percent year-on-year to US$452.68 billion, exceeding the government’s projection by 7.4 percentage points. The surge underscores Taiwan’s growing role in the global AI supply chain, with strong demand for high-end semiconductors and electronics offsetting weakness in non-tech sectors.
Orders for chips and components used in AI infrastructure remain strong, dispelling earlier expectations that shipments would cool in the second half of the year due to decreasing front-loading, Chen said.
The traditional year-end peak season for technology goods should support the momentum, she added.
Major US technology companies have announced AI investment plans that promise continued opportunities for Taiwan’s leading chipmakers and component suppliers.
However, ongoing US-China tariff negotiations could weigh on Taiwan’s trade prospects in the longer term, Chen said.
“Tariffs would have an effect, but not in the second half of this year,” she said. “The economy is stable for now.”
Meanwhile, inflation pressures have continued to ease. The consumer price index (CPI) rose 1.25 percent last month, marking the fifth consecutive month below the central bank’s 2 percent alert level and the lowest reading in more than four years.
Still, households “continue to feel the pinch,” with increasing costs for fruit, rent, dining out and medical services, even as vegetable prices have stabilized, Chen said.
The government would continue to monitor price trends and provide policy support as needed, she added.
Separately, the IMF has raised its forecast for Taiwan’s economic growth this year to 3.7 percent, amid stronger-than-expected recovery momentum worldwide.
In its latest World Economic Outlook report released on Tuesday, the IMF projected Taiwan’s real GDP would grow 3.7 percent this year, up from 2.9 percent in its April forecast.
However, next year’s growth forecast was revised downward to 2.1 percent from 2.5 percent.
The report also estimated that Taiwan’s consumer price inflation would reach 1.7 percent this year, slightly below the April projection of 1.8 percent, and would remain stable at 1.6 percent next year.
Additional reporting by CNA
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS