CIER forecasts Taiwan's GDP growth at 3.05% for 2025

Taipei, July 17 (CNA) Taiwan's GDP is forecast to grow 3.05 percent in 2025, with strong export momentum in the first half likely to ease in the second, the Chung-Hua Institution for Economic Research (CIER) said Thursday.

CIER said Taiwan's GDP growth is expected to slow to around 1.08 percent in the second half of 2025 from an estimated 5.17 percent increase for the first half. The slowdown is attributed to Trump-era tariff policies and a high base of comparison from early 2025.

CIER said first-half growth beat expectations as foreign buyers rushed orders to avoid U.S. tariffs. Taiwan's tech sector also saw strong demand, driven by AI-related exports.

Trump announced sweeping tariffs on April 2, including a 32 percent rate on Taiwanese goods, before pausing them for 90 days on April 9 to allow trade negotiations.

CIER estimated Taiwan's export growth will slow to 6.71 percent in the third quarter and 2.55 percent in the fourth quarter, down from 20.29 percent in the first quarter and 27.12 percent in the second quarter

For 2025, Taiwan's exports are projected to grow 13.74 percent, while imports are expected to rise 15.28 percent, CIER said.

CIER President Lien Hsien-ming (連賢明) told reporters that despite tariff challenges, Taiwan's strength in AI development will sustain growth momentum into the year's second half.

Lien estimated the Trump administration might impose a 15-20 percent tariff on Taiwanese goods due to close business ties. He warned higher tariffs could push up U.S. inflation by making imports more expensive.

CIER said private investment growth will moderate each quarter, falling from 20.77 percent in the first quarter to 3.96 percent in the second quarter, 2.31 percent in the third quarter, and 1.69 percent in the fourth quarter.

CIER added that private investments are expected to grow 7.03 percent in 2025, with fixed capital formation reaching 6.60 percent to drive GDP growth.

The think tank said private consumption is expected to grow 1.57 percent in 2025, slowed by a high comparison base from the previous year.

CIER said a stronger Taiwan dollar should ease import price pressures, but recent natural disasters have driven up food costs, and labor shortages have raised service sector expenses.

Taiwan's consumer price index is expected to rise 1.89 percent, staying below the central bank's 2 percent alert level, according to CIER.

CIER said that as the U.S. dollar weakens, the Taiwan dollar is expected to average NT$30.32 against the U.S. dollar in 2025, appreciating 5.92 percent from 2024.

According to CIER, Taiwan's economy is expected to grow 2.48 percent in 2026.