Taiwan’s economy is projected to expand 4.14 percent this year, driven by strong global demand for artificial intelligence (AI) hardware that continues to boost exports and imports, the Chung-Hua Institution for Economic Research (CIER, 中經院) said yesterday.
The forecast is an upward revision of 1.59 percentage points from October last year, reflecting an optimistic outlook for the nation’s export-led economy, CIER president Lien Hsien-ming (連賢明) said at a news conference in Taipei.
“The forecast does not yet account for the recently concluded Taiwan-US tariff negotiations, which are expected to have a positive impact on traditional industries, technology and investment,” Lien said.
Improved US policy clarity has already bolstered sentiment toward Taiwan’s technology sector, as seen in ongoing TAIEX rallies, Lien added.
Uncertainty over potential semiconductor tariffs had weighed on investment and the equity markets.
A key feature of the trade deal is a bilateral investment framework under which the US agreed to strategic technology cooperation with Taiwan across major industries, Lien said.
The arrangement is expected to benefit not only the semiconductor sector, but start-ups and emerging industries as well.
For manufacturers in traditional industries, the deal delivers a long-sought advantage. Tariffs on Taiwanese goods exported to the US are set to fall from 20 percent to 15 percent, bringing Taiwan onto equal footing with competitors such as Japan and South Korea for the first time in more than a decade, CIER said.
Exports are forecast to reach US$760.8 billion, an 18.75 percent increase from last year’s record high, providing solid support for economic growth, CIER researcher Peng Su-ling (彭素玲) said.
This year’s GDP growth would feature a more balanced structure, with domestic demand contributing 2.42 percentage points and external demand adding 1.72 percentage points, Peng added.
Cathay United Bank Co’s (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said the growth outlook could rise as export momentum in the electronics sector grows.
Taiwan’s leading electronics companies might see revenue growth exceed 25 percent, approaching 30 percent, pushing electronics exports to at least US$600 billion for this year, Lin said.
When combined with contributions from non-electronics industries, exports could surpass US$760 billion, he said.
If adjustments to automobile tariffs turn out more favorable than expected, domestic consumption could receive an additional boost, further supporting economic expansion, he added.
By Crystal Hsu / Staff reporter
Tue, Jan 20, 2026 Taipei Times