Taiwan’s economic outlook has improved this year despite persistent geopolitical risks in the Middle East, supported by robust demand for artificial intelligence (AI) technologies, the Chung-Hua Institution for Economic Research (CIER, 中經院) said yesterday.
CIER raised its full-year GDP growth forecast to 7.22 percent, up 0.3 percentage points from its January estimate, citing stronger-than-expected export performance in the first quarter.
“First-quarter exports proved much stronger than we had projected earlier, warranting an upward revision to the growth forecast,” CIER president Lien Hsien-ming (連賢明) said.
Photo: CNA
Solid external demand more than offset uncertainties from Middle East tensions and inflationary pressures linked to higher energy costs, he added.
CIER estimated that Taiwan’s economy likely expanded 13.19 percent in the January-to-March period, with growth expected to moderate to 8.3 percent in the second quarter, 6.05 percent in the third and 2.3 percent in the fourth.
The Directorate-General of Budget, Accounting and Statistics would release its growth update next month.
Exports are projected to surge 25.85 percent this year, while imports are forecast to rise 23.03 percent, underscoring the strength of Taiwan’s trade-led expansion.
Momentum remains heavily concentrated in the information and electronics sector, which continues to benefit from global AI demand, CIER said.
Taiwan is home to the world’s largest AI chipmaker and leading AI server manufacturers, all of which reported strong first-quarter earnings and remain upbeat about demand prospects.
Several international institutions have also upgraded their outlook for Taiwan, CIER researcher Peng Su-ling (彭素玲) said.
The Asian Development Bank recently projected 7.6 percent growth, while JPMorgan Chase & Co estimated expansion could reach 8.6 percent.
CIER said it expects the consumer price index (CPI) to rise about 1.98 percent this year, staying just below the central bank’s 2 percent inflation threshold.
Government measures, including fuel subsidies and frozen electricity tariffs, have helped contain inflation despite elevated global energy costs, Peng said.
International crude prices are hovering at about US$95 per barrel, easing from peaks higher than US$120, as a temporary US-Iran ceasefire has helped calm supply fears.
However, CIER warned that fuel prices remain a key uncertainty, with lingering geopolitical tensions posing risks such as supply disruptions and renewed oil price volatility.
Attention is also focused on the US Federal Reserve’s policy trajectory, which could influence Taiwan’s central bank decisions, Lien said.
The outlook remains closely tied to the duration of the Middle East conflict, he said, adding that US inflation has approached 3 percent ahead of leadership changes at the Fed, adding to policy uncertainty.
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