The government yesterday raised its economic growth forecast for this year to 11.05 percent, which would be the fastest pace in 39 years, as stronger-than-expected exports, investment and consumption extended the economy’s artificial intelligence (AI)-fueled expansion.
The latest forecast was 1.41 percentage points higher than the previous estimate of 9.64 percent in May, reflecting surging demand for Taiwanese-made AI hardware, stronger private investment and better-than-expected domestic consumption, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said.
“Exports, the biggest contributor to economic growth, have been driven by demand for electronics, and information and communications technology products,” DGBAS Minister Chen Shu-tzu (陳淑姿) told a news conference in Taipei.
Photo: CNA
Taiwan is at the center of the global AI supply chain and is benefiting as AI applications expand beyond cloud-based training into inference, AI agents and edge devices, driving demand for computing power.
Exports of non-tech products rose 8.6 percent in the first seven months of the year, suggesting that traditional industries are emerging from weakness, said Tsai Yu-tai (蔡鈺泰), head of the DGBAS statistics department.
The economy grew 14.15 percent in the first half and is projected to expand 11.42 percent in the third quarter before slowing to 5.37 percent in the fourth quarter.
Major US cloud service providers continue to ramp up investment in AI infrastructure, while demand for general-purpose accelerators and customized chips remains robust, Tsai said.
Against that backdrop, exports are projected to reach a record US$903.6 billion this year, up 41.19 percent from last year. Exports are also expected to benefit from the recovery in traditional manufacturing and tight supplies of key electronic components, including memory chips, which have pushed up prices.
Private investment is forecast to grow 11.58 percent this year, the fastest pace in five years and 5.15 percentage points higher than the previous estimate.
Demand for AI infrastructure has prompted global customers to secure capacity through advance payments and long-term contracts, encouraging local semiconductor, packaging and testing, memory, substrate and equipment suppliers to accelerate capacity expansion, Tsai said.
The DGBAS also increased its inflation forecast for this year to 2.07 percent, slightly above the central bank’s 2 percent warning threshold, citing higher fuel prices amid tensions in the Middle East.
The inflation outlook remained manageable, Tsai said, adding that consumer prices rose 1.7 percent in the first half, while total wages increased 3.5 percent, meaning real wages were up.
Inflation is unlikely to accelerate sharply and is expected to moderate to 1.9 percent next year, the DGBAS said.
The agency forecast economic growth of 6.04 percent next year, with exports projected to reach US$1.0725 trillion, up 18.7 percent from the projected total for this year released yesterday.
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