The Taiwan Institute of Economic Research (TIER) amended this year’s economic growth model to 3.96%, up 15 points from July’s 3.81% forecast. TIER credits the uptick to the dual forces of domestic demand and foreign trade.
National Chengchi University Public Finance Professor Lien Hsien-Ming (連賢明) noted that Taiwan’s economic performance is quite good, pointing to the AI industry as the driving force for 2024. Ming said the industry was responsible for increasing Taiwan’s export sales and investments, as well as domestic demand, stating that AI’s impact on Taiwan’s economy has been a net positive.
Looking to 2025, TIER projects that if the global economic trend remains flat amid lingering geopolitical risk, the estimated growth rate is 3.03%. While slower than 2024, is higher than 3% and therefore still slightly above what economists consider an acceptable growth.
Concerning inflation, TIER pointed out that due to increases in fruit prices due to energy and disaster adjustments, the Consumer Price Index (CPI) growth rate for 2024 is about 2.17%, exceeding the 2% target for the third consecutive year. The annual CPI growth rate for 2025 sits at 1.96%, slightly below the target.
Concerning outside forces’ impact on Taiwan’s economy, Lian mentioned that the U.S. presidential election will likely have an impact, noting its influence on global interest rate and industrial policies. However, the momentum from Taiwan’s semiconductor industry, particularly in the AI sector, should be such that it will not be so severe.
