Taiwan's Q2 GDP growth estimated at 7.96%

Taipei, July 31 (CNA) Taiwan's GDP growth in the second quarter of 2025 reached an estimated 7.96 percent over the previous year, according to data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on Thursday.

The figure is revised upward by 2.73 percentage points from May and the highest quarterly number in four years.

Exports in this quarter soared by 34.06 percent, driven by strong demand for artificial intelligence (AI) and new technology applications, as well as orders placed ahead of the expiration of U.S. tariff suspension, the DGBAS said.

Meanwhile, good performance in triangular trade -- a trade pattern involving three countries or regions -- spurred exports of goods and services up by 35.1 percent year-on-year, up 6.58 percent from the previous estimate.

DGBAS specialist Chiang Hsin-yi (江心怡) said that electronic components and information, communication and audio-video products accounted for over 70 percent of exports, indicating strong demand for artificial intelligence, but noted that other industries showed unspectacular or even declining performance.

Led by export and investing demands, Taiwanese firms also actively prepared materials and purchased equipment, resulting in a growth of 31.95 percent in imports of goods and services, 6.25 percentage points higher than the preliminary estimate, according to the DGBAS.

In balance, the net foreign demand contributed to 5.77 percentage points of the period's economic growth, the DGBAS said.

Capital formation, which includes private and public investment, showed a growth of 5.56 percent, up 7.9 percentage points from the initial estimate, DGBAS data showed.

However, private consumption was relatively weak, with a growth of only 0.56 percent.

Chiang said that automobile purchase sentiment was delayed, and, along with fluctuations in Taiwan's stock exchange, weakened consumption.

Looking to the future, local economic institutions commonly predict a bleak economy in the latter half of the year as "reciprocal tariffs" with the United States are set to be implemented in August, with growth forecast to be lower than 1 percent.

Chiang said that the tariffs will directly impact Taiwan's exports, but investments are long-term. From the data in the second quarter, new tech demands are strong and may extend relevant business investments into the third quarter.

The DGBAS will release a forecast of Taiwan's economic growth for 2025 on Aug. 15, Chiang said.

Predictions from overseas and local institutions of Taiwan's annual growth rate in July stand at around 2.8 percent to 4 percent, she added.