Taiwan Raises 2025 Growth Forecast Amid Strong Demand for Artificial Intelligence

Taiwan has raised its economic growth forecast for 2025 to 3.29%, up from the previous estimate of 3.26%, despite potential trade disruptions from the possible return of U.S. presidential candidate Donald Trump. The updated forecast was announced by the statistics office in Taipei on Friday. The office also increased its growth expectation for 2024 from the previously predicted 3.9% to 4.27%.

Taiwan's growth in the third quarter was reported at 4.17% year-on-year, exceeding the government's earlier estimate of 3.97%. These figures emerge during a time of uncertainty for Taiwan's economic outlook due to the potential policies of Trump, particularly given the island's significant trade relationships with both China and the U.S.

This week, Trump threatened to impose an additional 10% tariff on Chinese goods, citing China's failure to curb drug trafficking to the U.S. Taiwan's economy has ranked among the top performers in Asia this year, bolstered by global demand for high-tech products. Leading AI companies, such as NVIDIA, Microsoft Corp, and OpenAI, increasingly rely on Taiwanese firms for chip production, server construction, and cooling solutions.

The strong economic performance has allowed Taiwan's central bank to maintain its benchmark interest rate at a 16-year high, leading banks to increase reserve requirements and take measures to cool an overheated property market.