Taiwan's GDP forecast to grow 3.8% in 2026

Taipei, Jan. 15 (CNA) Taiwan's GDP is expected to grow 3.8 percent in 2026 on the back of robust global demand for AI applications and a recovery of private consumption, according to a forecast released Thursday by the Standard Chartered Group.

Taiwan's export-oriented economy will continue to benefit from strong AI demand, which will boost sales of Taiwan-made semiconductors and related tech devices, Standard Chartered said in a statement.

Based on those factors, the group said, it has decided to raise its estimate for Taiwan's GDP growth in 2026 to 3.8 percent from its previous projection of 2.5 percent.

The banking group's latest forecast is more upbeat than that of the Directorate General of Budget, Accounting and Statistics, which raised its growth forecast in late November to 3.54 percent from its previous 2.81 percent.

In Thursday's statement, Standard Chartered said that while tariff talks are still ongoing between Taipei and Washington, Taiwan's exports have been little affected by the United States' tariff policies, as about two-thirds of the exports -- mainly semiconductors and computer-related products -- have been temporarily exempted from the levy.

The global economy also avoided any major impact last year from the U.S. tariffs, mainly because major central banks maintained loose monetary policies, and buyers moved to build up inventories ahead of the U.S. tariffs, Standard Chartered said.

It forecast that the global economy will face some headwinds this year due to uncertainties created by the trade policies of the world's major economies, geopolitical unease, and adjustments in financial markets this year.

With rate cut cycles coming to an end, global economies are expected to resort to increasing fiscal expenditures and pursuing more investments to sustain growth this year, the group said, adding that private consumption could become a pillar of growth.

The banking group has also raised its 2026 growth forecast for the world's largest economy, to 2.3 percent from 1.7 percent, saying that the U.S. will be boosted by tax cuts for enterprises, the growth of AI applications, and an expected recovery in its labor market in the second half of this year.

China, the world's second-largest economy, is expected to see 2026 GDP growth of 4.6 percent, Standard Chartered said, upgrading its earlier estimate of 4.3 percent and citing the fiscal and monetary policies maintained by the Chinese government.

The group also gave a projection for 2027, saying Taiwan's GDP will grow by 2.7 percent.