Taiwan's economy forecast to grow 3.16% in 2025: Think tank

Taipei, Dec. 14 (CNA) The Taiwan Research Institute (TRI) on Wednesday forecast economic growth of 3.16 percent for Taiwan in 2025, driven by continued demand for artificial intelligence (AI) products.

The booming artificial intelligence (AI) market is expected to boost Taiwan's export performance, with real growth in goods and services exports projected to reach 5.95 percent in 2025, according to the think tank.

"The future economy will revolve around AI, which relies on Taiwanese chips," TRI founder Liu Tai-ying (劉泰英) told a news conference.

Inflation is also expected to improve, with the Consumer Price Index (CPI) growth rate forecast to fall below the 2 percent inflation threshold, reaching 1.99 percent next year.

However, Liu pointed out that Taiwan may face challenges due to an international environment filled with uncertainties.

These include the possibility of a renewed tariff war under U.S. President-elect Donald Trump, the ongoing Russia-Ukraine conflict, and escalating tensions in the Middle East, Liu said.

Despite these challenges, Liu said he remained optimistic about Taiwan's long-term outlook, stressing that semiconductor chips continued to be a key strategic asset.

The demand for increasingly advanced chips is expected to grow particularly during war, which bodes well for Taiwan's economic future, he said.

Meanwhile, Taiwan's economic growth in 2024 is expected to exceed the previous forecast thanks to the AI boom, the TRI said, revising it upwards to 4.21 percent, an increase of 0.64 percentage points.