Booming Taiwan to Raise 2026 Growth Outlook on AI, Trade Deal

vzp[r90xbabim}mx7irs]52e_media_dl_1.png Bloomberg

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(Bloomberg) — Taiwan is set to upgrade its forecast for economic growth this year even after a torrid 2025 on signs the AI boom has room to run and a final trade deal with the US.

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The statistics bureau in Taipei will release its outlook for 2026 at 4 p.m. on Friday — its first prediction since a 3.5% call in November. That forecast was several weeks before Taiwan and the US agreed to slash tariffs on goods from the self-governed island, a pact they just signed.

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Taiwan’s National Development Council, a planning agency, recently set its 2026 growth target at 4.56%.

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“It is likely that they will have to revise up their 2026 forecast,” said Michelle Lam, Greater China economist at Societe Generale SA. Even so, she said the impact of the trade deal “will likely be marginal” since chip-related products — the bulk of Taiwan’s US-bound exports — are already exempt from the duties because they were subject to a separate probe.

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The new outlook will come as a slew of financial institutions boost their calls for an economy that last year grew at the fastest pace since 2010 — some of them in eye-popping fashion. This week, Bank of America Corp. nearly doubled its projection on “relentless global demand” for the tech hardware that Taiwanese companies make and a more stable currency, among other reasons.

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The increased optimism is underpinned by Taiwan’s roaring exports. Outbound shipments surged some 70% in January, the fastest pace in 16 years. Taiwan Semiconductor Manufacturing Co., the main chip supplier to Nvidia Corp. and Apple Inc., has said it plans to boost spending in 2026 and recently reported a 37% jump in January revenue. Those figures come as Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and others step up spending to develop artificial intelligence capabilities.

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On Thursday, the US and Taiwan finalized a trade agreement to cut duties, boost market access for American products in Asia, and channel billions of dollars into American energy and technology projects. The signing formalizes an agreement announced in January to lower tariffs on goods from the self-governed island to 15% from 20%.

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The AI buildout has propelled Taiwan stocks to new highs. The benchmark Taiex has advanced at least 25% for three straight years, and so far in 2026 it is up 16% to a record. The Taiwan dollar snapped a three-year losing streak in 2025, climbing more than 4% versus the greenback. It has held steady so far this year.

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Still, other areas of the economy are expanding much more slowly than exports. In November, the statistics bureau said private consumption would grow just 2.43% this year.

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—With assistance from Cynthia Li and Neha D’silva.

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