Taipei:The Asian Development Bank (ADB) has revised its forecast for Taiwan's gross domestic product (GDP) growth in 2026, raising it to 11% due to a surge in artificial intelligence (AI)-related exports.
According to Focus Taiwan, the ADB's Asian Development Outlook September 2026 report increased Taiwan's growth projection by 1.5 percentage points from its July estimate. This adjustment reflects the country's economic benefits from the AI boom in the first half of 2026, despite global economic challenges.
In the first half of 2026, Taiwan's economy grew by 14.1%, marking the fastest first-half growth in 50 years. The second quarter alone saw a 12.9% expansion. Customs data indicated a 65% increase in technology exports in U.S. dollar terms during this period, while total exports grew by 28%.
The report also highlighted a 22% rise in imports, mainly due to AI-related fixed investment and inventory buildup to meet the anticipated demand for technology products. Private consumption rose by nearly 6% in the first half of the year, supported by an optimistic growth outlook, higher stock prices, stable property prices, and wage increases extending from the technology sector to other industries.
Businesses maintained a positive outlook, increasing fixed investment by nearly 10%, with inventory accumulation accounting for 0.7% of GDP. The ADB emphasized that technology exports are likely to continue driving Taiwan's economic growth, supported by ongoing announcements of substantial investments in AI infrastructure and data centers.
While growth is expected to moderate in 2027 due to slower investment growth once capacity expansion meets demand, the ADB has raised its 2027 growth forecast for Taiwan to 5% from the previous 4%. The bank kept its 2026 inflation forecast at 2%, projecting stable inflation over the next two years, despite a recent increase influenced by Middle Eastern conflicts and adverse weather conditions.
The ADB report suggests that Taiwan's export outlook depends significantly on the continued strength of the AI-driven investment cycle. However, prolonged geopolitical conflicts or severe El Ni±o conditions could impact global demand by increasing energy and food prices, potentially affecting AI investment and demand for Taiwan's exports.