Chung-Hua Institution for Economic Research (CIER) raised its economic growth forecast for Taiwan to 12.16%, citing strong AI demand and domestic consumption.
CIER President Lien Hsien-ming said AI remains the main growth engine, with robust demand for chips and electronics supporting trade. Its forecast customs exports and imports to grow 40.51% and 39.09% this year, while private consumption is projected to rise 4.94%, up from 1.36% last year.
The institute also forecast private investment to grow 10.77% as global cloud service providers boost AI spending and Taiwanese companies expand capacity. Traditional industries are also investing in automation, smart manufacturing, and power infrastructure upgrades, it said.
CIER raised its forecast for annual consumer price inflation to 2.06%, citing the ongoing Middle East conflict and high international oil prices. Singapore-based DBS Group senior economist Ma Tie Ying said indicators including AI spending, pricing and token usage point to strong fundamentals, although sustaining high investment growth will become harder as spending expands.
National Central University economics professor Yao Jui said AI would not constitute a bubble if it delivered clear productivity gains and higher corporate profits. She identified risks involving AI agents exceeding their authority or launching attacks and warned that overly restrictive US regulations could curb investment and hurt export orders.
Lien said the boom may feel different from the country’s earlier high-growth era because rising stock prices have not translated into comparable wage gains or investment returns for ordinary people.
Ma said the stock market’s roughly 70% rise this year has created a wealth effect that supports domestic demand, while the divide associated with a K-shaped economy has eased, though disparities remain.