Academia Sinica raises forecast for Taiwan's 2026 GDP growth to 10.16%

Taipei, July 13 (CNA) Academia Sinica on Monday sharply raised its forecast for Taiwan's economic growth in 2026 to 10.16 percent, citing easing uncertainty over the United States' tariff policy and continued expansion of artificial intelligence investment.

The revised forecast, announced at a press conference on Taiwan's economic outlook, was up from the 3.71 percent growth projection the institute released in December 2025.

Lin Chang-ching (林常青), a joint research fellow at Academia Sinica's Institute of Economics, said the upgrade was driven primarily by Taiwan's stronger-than-expected economic performance in the first quarter and sustained investment in AI infrastructure.

Taiwan's economy expanded 14.55 percent year-on-year in the first quarter, reflecting robust export growth fueled by surging global demand for AI applications, Lin said.

The continued investment in AI infrastructure has not only boosted exports but also accelerated business investment, resulting in stronger overall economic growth, he said.

According to Lin, global AI investment is expected to continue to grow in the second half of the year, helping to sustain Taiwan's export momentum.

He also pointed to rising stock prices as another source of support for the domestic economy, saying the resulting wealth effect has encouraged consumer spending on dining, leisure, entertainment, and culture.

Taiwanese spending on overseas travel has also continued to increase, contributing to 4.74 percent year-on-year growth in real private consumption in the first quarter, he said.

Despite the upbeat outlook, however, Taiwan's year-on-year economic growth in the second half of 2026 is expected to moderate, Lin forecast.

He said that because of a higher comparison base last year, the second-half growth is likely to be slower, although exports remained strong in the second quarter of 2026, and imports of machinery and equipment increased, supporting future production capacity.