Taiwan yesterday sharply raised its economic growth forecast for this year after a blistering first quarter, as surging global demand for artificial intelligence (AI) infrastructure fueled exports, investment and corporate profits across the technology-driven economy.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) revised its forecast for Taiwan’s GDP growth this year to 9.64 percent, up from the 7.71 percent estimate in February.
The consumer price index is expected to rise to 1.93 percent this year amid energy supply disruptions in the Middle East, but still below the central bank’s 2 percent alert threshold.
Photo: Ann Wang, Reuters
The upward revision followed a stronger-than-expected first quarter, during which GDP expanded 14.55 percent from a year earlier, higher than the 13.69 percent estimate last month.
Taiwan continues to benefit from a global AI spending boom that is rapidly expanding beyond cloud-based training models and conversational AI into inference computing, agentic AI and edge devices — all of which require far greater computing power, DGBAS Minister Chen Shu-tzu (陳淑姿) said.
“As AI accelerates, development is shifting from cloud training and conversational AI toward inference, agentic AI and end-user devices, driving even stronger demand for computing capacity,” Chen told a news conference in Taipei.
Major global cloud service providers are ramping up capital expenditures again, boosting demand for advanced AI chips, servers and key hardware components. Taiwan sits at the center of that expansion, thanks to its dominance in advanced semiconductor manufacturing.
Taiwanese chipmakers are aggressively expanding production capacity to meet soaring demand, generating broad and sustained benefits for exports, Chen said.
The DGBAS now expects exports to surge 39.77 percent this year, while imports are projected to jump 33.53 percent.
Tight supply of AI-related products has also pushed up prices, further lifting the value of overseas shipments, Chen said.
The government also upgraded its outlook for domestic demand. Strong corporate earnings have driven Taiwan’s stock market to record highs, supporting wage growth, dividend payouts and household wealth.
Those factors, together with continued strength in outbound and inbound travel, should help support consumer spending, the DGBAS said.
Private consumption is now predicted to grow 3.6 percent this year, up 1.09 percentage points from the February forecast.
At the same time, private investment is to remain strong, as semiconductor, packaging and testing, memory chip, substrate and equipment makers accelerate spending for domestic expansions, and research and development, the DGBAS said.
Private investment is forecast to grow 6.43 percent this year, following last year’s 10.96 percent increase, it said.
Inflation remains relatively contained despite rising global energy prices linked to tensions in the Middle East, the DGBAS said, adding that the government’s measures to stabilize domestic fuel prices helped cushion the impact of a nearly 70 percent hike in oil prices between March and this month.
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