Standard Chartered Bank yesterday raised its forecast for Taiwan’s economic growth this year to 8 percent, citing strong export momentum driven by surging global demand for semiconductors linked to the rapid development of artificial intelligence (AI).
Taiwan would continue to benefit from the AI boom, which is boosting worldwide semiconductor demand and prompting companies to expand investment, thereby supporting its export growth, Standard Chartered senior economist for Greater China and North Asia Tommy Wu (胡東英) told a news conference in Taipei.
Taiwan’s exports swelled 45 percent year-on-year in the first two months of this year, highlighting robust global demand for technology products and electronic components, Wu said.
Photo: Reuters
Taiwan’s economic outlook remains bright as shipments of information and communications technology products and electronic components continue to rise, he said, adding that Taiwan’s leading position in advanced chip manufacturing means its semiconductor industry is likely to thrive for a prolonged period.
Strong exports and sustained investment related to AI would underpin Taiwan’s economic expansion in the coming years, Wu said.
However, Taiwan has seen a “two-speed” economy, similar to other nations across Asia, the economist said.
While the technology and electronics sectors are benefiting from AI-driven demand, traditional industries and private consumption remain relatively weak, he said.
The divergence between sectors has widened household income gaps and helped keep inflation relatively subdued, a trend that is likely to persist for the time being.
Wu also highlighted several uncertainties that could affect Taiwan’s economic momentum, including ongoing fluctuations in global oil prices, potential tariff risks associated with US trade policies and a slowdown in the property market.
Nevertheless, Taiwan’s strong position in the global semiconductor supply chain would remain a key driver of growth in the near term, Wu said.
Meanwhile, Standard Chartered chief economist for Greater China and North Asia Ding Shuang (丁爽) said that global economic growth remains resilient this year despite uncertainties stemming from US tariffs.
That said, some risks are yet to be fully priced in and the key drivers of global economic momentum are gradually shifting from monetary policy to fiscal policy, Ding said.
Domestic demand and investment are also increasingly replacing exports as the main forces shaping economic development, he said.
As geopolitical factors increasingly reshape global economic strategies, commodities such as oil, rare earths and semiconductors are likely to take on greater importance, he said.
The surge in oil prices amid military conflicts in the Middle East poses challenges for energy-importing Asian economies, he said.
“It is too early to assess the full impact, but the longer the conflict lasts, the greater the negative challenges will be,” Ding said.
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