Taiwan: AI-driven growth and inflation outlook – DBS
DBS Group Research economist Ma Tieying assesses Taiwan’s macro outlook, highlighting a strong AI cycle, diversified energy imports and evolving tariff dynamics with the US.
DBS Group Research economist Ma Tieying examines Taiwan’s macroeconomic outlook, noting a robust AI sector, diverse energy imports, and shifting tariff dynamics with the US. The report predicts a deceleration in GDP growth from around 12% year-on-year to high-single digits from the fourth quarter of 2026. Full-year projections for 2026 and 2027 GDP growth stand at 11.6% and 5.6%, respectively.
Inflation is forecasted to hover near 2.5% in the fourth quarter of 2026. Despite some moderation, GDP growth is expected to remain on track with expectations. The full-year forecasts for GDP growth in 2026 and 2027 are 11.6% and 5.6%, respectively. CPI inflation is projected to remain close to 2.5% in the fourth quarter of 2026 and 2.0% and 2.1% for 2026 and 2027, respectively.
Taiwan has managed the global environment effectively thus far, propelled by strong AI exports and investments, a diversified energy import strategy, and efforts to manage higher energy costs. Normalization is anticipated in the fourth quarter of 2026 and 2027 as the AI-driven growth surge subsides and domestic energy prices adjust.
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