Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), emphasized on December 4 that exchange rate volatility will remain the main factor influencing financial markets through 2026. He urged enterprises to proactively develop hedging strategies to navigate these fluctuations effectively. The forecast projects the New Taiwan Dollar will close this year at approximately 30.91 against the US dollar, then appreciate beyond the 30-dollar threshold to reach 29.42 in 2026, indicating limited room for depreciation.
Speaking at a forum hosted by the Taiwan Insurance Institute on the topic “Trump and AI: 2026 International Economic Outlook,” President Lien noted that Taiwan’s trade surplus with the United States will exceed $100 billion this year. Despite weakness in certain traditional industries, there remains little justification for significant depreciation of the New Taiwan Dollar. While currency market fluctuations are expected to continue, extreme scenarios such as the single-day appreciation of one dollar witnessed in May of this year are unlikely to recur.
Regarding the global economic outlook, CIER estimates growth of approximately 3% in 2026. However, trade friction, supply chain restructuring, and uncertainty surrounding US tariff policies will continue to suppress business investment and trade momentum. AI-related investment will sustain resilience in both the global and the Taiwan economies. However, the International Monetary Fund has warned that the AI market could face bubble risks if profits fall short of expectations. President Lien indicated that while AI-related developments will indeed generate market volatility, they will not trigger a comprehensive collapse. Nevertheless, constrained policy space across nations means inflationary pressures require continued attention.
Three critical uncertainties surrounding Taiwan’s economic growth in 2026 include the outcome of Taiwan-US tariff negotiations, the extent of Chinese production capacity spillover, and the strength of global AI investment momentum. These factors have led to highly divergent forecasts of Taiwan’s growth, ranging from 1.79% to 3.3%.
Author: CIER Editorial Team
Date: December 5, 2025