The Chung-Hua Institution for Economic Research （CIER, 中華經濟研究院） yesterday sharply raised its forecast for Taiwan’s economic growth this year to 5.45 percent, citing sustained global demand for semiconductors and artificial intelligence （AI）-related technologies.
The upgrade from 3.05 percent in July underscores stronger-than-expected growth momentum, despite global uncertainties and rising US-China trade friction.
“Taiwan’s economic showing has turned out better than most research bodies expected,” CIER president Lien Hsien-ming （連賢明） told a news conference in Taipei.
The outperformance reflects Taiwan’s dominant role in advanced semiconductor manufacturing and the global buildout of AI infrastructure, he said.
Lien linked the brighter outlook to Taiwan Semiconductor Manufacturing Co （TSMC, 台積電）, whose earnings guidance on Thursday boosted market optimism.
The world’s largest contract chipmaker raised its annual revenue growth forecast to 35 percent from 30 percent, driven by surging demand for leading-edge chips used in AI applications.
Other local companies in the AI supply chain have also posted strong results this year, even as traditional industries continue to face headwinds due to weak global consumption.
CIER expects third-quarter GDP growth to reach 5.82 percent before moderating to 2.71 percent in the fourth quarter, consistent with the usual slowdown among upstream technology suppliers.
CIER researcher Peng Su-ling （彭素玲）, citing S&P Global Market Intelligence data, said that Taiwan’s expansion stands out globally, with projected growth outpacing the global average of 2.69 percent and South Korea’s 0.91 percent.
Taiwan’s growth this year reflects a balanced mix of domestic and external demand, Peng added.
Domestic demand is expected to contribute 2.5 percentage points to overall GDP, supported mainly by a 10.55 percent increase in private investment tied to AI-related capacity expansion, Peng said.
Exports are forecast to add another 2.95 percentage points, rebounding from last year’s drag, Peng added.
CIER expects consumer prices to rise 1.81 percent this year, with inflationary pressures easing in the second half as the New Taiwan dollar’s appreciation helps offset import costs.
However, households could continue to feel the pinch from rising rent, food prices and service charges, Peng said.
The think tank said its forecast does not account for renewed trade tensions between Washington and Beijing.
The US has threatened to impose tariffs of up to 100 percent on Chinese goods after Beijing tightened controls on rare earth exports.
Lien said the direct impact on Taiwan should remain limited, as the local semiconductor industry is not a major consumer of rare earth materials.
By Crystal Hsu / Staff reporter
TAIPEI TIMES Sat, Oct 18, 2025