The Chung-Hua Institution for Economic Research (CIER) released Taiwan’s Macroeconomic Forecasts for Q4 on October 17, 2025. Thanks to the AI technology boom and the initial effects of the buffer period for reciprocal tariffs, Taiwan’s economic growth reached 6.75% in the first half of 2025, with Q2 showing an impressive 8.01% growth. Consequently, the full-year economic growth rate has been revised upwards to 5.45%, marking a significant increase of 2.4 percentage points from the July forecast of 3.05%. This indicates that Taiwan’s economic momentum is much stronger than previously anticipated.
Hsien-Ming Lien, President of CIER, stated that this year’s economy has presented a robust pattern of “warmth both domestically and externally.” While global tariff policies and geopolitical risks remain uncertain, the expansion of AI applications, robust exports, and vibrant investment have collectively supported growth momentum, maintaining an economic outlook of “cautious optimism.”
Domestic Investment and Net Exports Propel Taiwan’s Economic Momentum
Su-Ling Peng, Director of the Center for Economic Forecasting, noted that domestic and external demand constitute the main pillars of growth. Investment grew 10.55% year-on-year, contributing 2.73 percentage points. Private consumption increased by 1.56% annually, with a recovery in the second half supported by wealth effects from the stock market. However, external demand was the primary driver of economic growth. Fueled by strong demand for semiconductors and AI, merchandise and services exports surged by 26.59% year-on-year. This growth pushed net exports to NT$3.63 trillion, a 23.82% annual increase.
Inflation and labor market performance remained stable. The full-year CPI growth rate is estimated at 1.81%, falling below 2% for the first time in three years. The average NTD to USD exchange rate was 30.91, appreciating by 3.88%. The unemployment rate held at 3.36%, indicating stable employment conditions.
Looking ahead, S&P Global forecasts 2025 global growth at 2.69%, with major economies showing renewed momentum. While US-China trade negotiations remain uncertain, the US continues to view semiconductors as a core area of cooperation with Taiwan. The CIER offers a more moderate forecast for Taiwan, expecting the economic growth rate to slow to 2.55% in 2026. However, AI applications and semiconductor investment will continue to be key supports for medium- to long-term development.
Author: CIER Editorial Team
Date: October 17, 2025