Taipei: Taiwan's Directorate General of Budget, Accounting and Statistics (DGBAS) on Friday raised its forecast for gross domestic product (GDP) growth in 2026 to 9.64 percent, driven by a surge in global demand for artificial intelligence (AI) technologies.
According to Focus Taiwan, the DGBAS has increased its GDP growth forecast for the year by 1.93 percentage points from its earlier estimate in mid-February. If achieved, this figure will represent Taiwan's highest annual growth since 2010, when the economy expanded by 10.25 percent.
The upward revision follows Taiwan's economy registering a 14.55 percent growth in the first quarter, marking the highest quarterly growth in 48 years, and exceeding the April forecast by 0.86 percentage points, the DGBAS reported.
The agency also upgraded its growth forecasts for Taiwan's exports, private investment, and private consumption for 2026. The accelerating momentum in AI development has sustained strong global demand for Taiwan-made high-end chips, servers, and other key electronic components, the DGBAS noted.
Consequently, the DGBAS projects Taiwan's merchandise and service exports will grow by 19.93 percent in 2026, a rise of 7.25 percentage points from February's forecast, while imports are expected to increase by 17.30 percent, up 8.24 percentage points from the previous projection.
Tsai Yu-tai, head of the DGBAS's Department of Statistics, stated that Taiwan's merchandise exports are anticipated to reach US$894.5 billion in 2026, with servers and related goods making up almost 40 percent of this total, compared to about 30 percent in 2025, amid the ongoing AI boom.
Taiwan has developed a comprehensive supply chain, and as production rises, the nation has witnessed accelerated export growth momentum, Tsai explained, highlighting how strong outbound sales are invigorating local investments.
In response to the robust global demand for AI infrastructure, local enterprises in the semiconductors, IC packaging and testing, and IC substrates sectors are eager to increase investments, according to the DGBAS, which forecasts private investments to grow by 6.43 percent in 2026, up 2.19 percentage points from the previous forecast.
Taking public investments into account, the DGBAS projects Taiwan's fixed capital formation to grow by 5.83 percent in 2026, an increase of 1.75 percentage points from the earlier estimate.
A booming stock market and rising wages have enhanced households' wealth effects, boosting disposable income and expected consumption growth, the DGBAS added.
The agency predicts private consumption will grow by 3.60 percent in 2026, an improvement of 1.09 percentage points from its earlier forecast.
Despite military conflicts in the Middle East driving crude oil prices higher, the DGBAS indicated that government price stabilization measures have alleviated inflationary pressure. It forecasts the local consumer price index to rise by 1.93 percent in 2026, staying below the 2 percent alert set by the central bank, albeit a 0.25 percentage point increase from the previous forecast.