The Chung-Hua Institution for Economic Research (CIER) think tank raised its projection of Taiwan’s economic growth this year to 12.16 percent, which would mark the highest GDP growth rate since 1988. This came in a fourth-quarter economic forecast report on Friday, October 16.
CIER President Lien Hsien-ming (連賢明) said this is the third upward revision this year and that Taiwan’s economy is “hot both at home and abroad.” This is due to benefits from AI investment and expanding demand for technology products. However, energy prices and weather conditions are pushing up prices, with the consumer price index (CPI) forecast to rise to 2.06 percent for the full year. The report projects that economic growth will slow down to 5.97 percent in 2027.
Lien noted that this year’s growth comes not only from exports, but also from rising domestic investment and consumption. According to CIER’s report, domestic demand contributes 6.63 percentage points to total annual growth, while net external demand 5.53 percentage points.
Strong demand for AI-related products is driving a sharp rise in exports. CIER projects that its total value will approach US$900 billion this year, which is a 40.51 percent increase year-on-year. Private investment will grow 10.77 percent in 2026, while private consumption is expected to rise by 4.94 percent, buoyed by real wage growth, an improving job market, and the wealth effect from the stock market.
CIER forecasts that CPI will rise 2.06 percent this year, up 0.4 percentage points compared to last year. This is mainly driven by energy prices, weather conditions, and higher service costs stemming from labor shortages and rising wages. Lien declined to comment on whether inflation will prompt the central bank to adjust interest rates in the fourth quarter.
RtiNews
Editor： Tomasz Koper