TAIPEI (TVBS News) — The central bank (中央銀行) announced on Dec. 18 that Taiwan's economic growth rate for 2025 has been revised upward to 7.31%, marking a 15-year high. The bank credited an unexpected surge in demand for artificial intelligence as the primary driver of this growth. However, it warned of potential risks due to immature AI end applications and existing supply chain vulnerabilities.
The central bank also forecasted a 3.67% growth rate for 2026, signaling a tempered outlook. It highlighted that global economic momentum might suffer from the ongoing developments in U.S. tariff policies, particularly the outcomes of investigations under Section 232 of the U.S. Trade Expansion Act. These outcomes could have a significant impact on global supply chains.
Diverging monetary policies among major economies are affecting global capital flows and the stability of stock, currency, and bond markets. Additionally, China's efforts to curb overcapacity and prevent cutthroat pricing are expected to influence the recovery strength of Taiwan's traditional goods exports.
Geopolitical risks continue to add layers of uncertainty to the global economic landscape. The progress of peace talks between Russia and Ukraine, escalating tensions between China and Japan, and U.S. actions concerning Venezuela contribute to this uncertainty. Furthermore, the intensification of extreme weather conditions poses a threat to crop yields, potentially driving up food and fuel prices, which could destabilize global price stability.
