The Chung-Hua Institution for Economic Research (CIER) released its 2025 Taiwan’s Macroeconomic Forecasts report on October 17, underscoring that global political and economic turbulence persists unabated. The 4 main uncertainties impacting Taiwan’s growth are tariff policy changes, the monetary policy directions of major economies, the recovery of China’s domestic demand, and confidence in domestic investment. U.S. trade policy and the ongoing tariff negotiations are shaping global supply chain configurations and impacting Taiwan’s export structure. Although major economies have begun to lower interest rates sequentially, inflation expectations remain elevated, and policy rhythms are inconsistent, intensifying market volatility. China’s sluggish property market and persistently high youth unemployment will dampen growth momentum in 2026, indirectly affecting Taiwanese business investment and export allocation.
Hsien-Ming Lien, President of the CIER, pointed out that while AI demand has bolstered economic performance, business sentiment regarding future economic conditions has turned conservative since the new tariff policies in April, and investment and consumer confidence have yet to recover. International negotiations remain subject to variables, but excessive pessimism is unwarranted at this stage. The United States and China may achieve incremental progress following the Asia-Pacific Economic Cooperation (APEC) meeting. While conflicts are unlikely to be resolved in the short term, they should not deteriorate comprehensively. President Lien noted that China’s rare earth export controls have limited impact on Taiwan’s semiconductor industry, primarily representing indirect effects on the equipment side. Taiwan’s industrial foundation remains robust and demonstrates high adaptive resilience.
Jiann-Chyuan Wang, Vice President of the CIER, emphasized that in response to the global investment chain restructuring and the New Taiwan Dollar appreciation trend, enterprises should seize the low-interest-rate environment to actively advance overseas deployment as well as mergers and acquisitions. Meanwhile, the government must strengthen capital repatriation mechanisms and tax system coordination. The current period represents a critical window for securing positions in international markets and promoting government-to-government (G2G) cooperation. If Taiwan can integrate traditional and high-tech industries as well as develop transnational industrial clusters, it will inject long-term growth momentum into Taiwan’s economy.
Author: CIER Editorial Team
Date: October 20, 2025