Taiwan’s economy is set to maintain stable growth of more than 3 percent this year, bolstered by a favorable global environment and strong exports and private investment, the National Development Council (NDC) said in a report at a Cabinet meeting yesterday.
The council expressed cautious optimism on the back of major central banks easing interest rates, rising demand for artificial intelligence (AI), and local firms investing in expanding capacities and updating technologies.
The projected expansion comes following an estimated 4.3 percent GDP growth last year, meaning Taiwan is outperforming major trade rivals, including Singapore, South Korea and Hong Kong, the council said.
Photo courtesy of Executive Yu
Global trade is projected to expand 3.1 to 3.2 percent this year with uneven economic showings among major countries, the council said, adding that the US might maintain stable growth, while Japan and the eurozone might stall.
Taiwan’s exports, its main growth driver, would exceed US$500 billion, as US cloud-based service providers Meta Platforms Inc, Microsoft Corp, Alphabet Inc and Amazon.com have reiterated their commitment to AI investment, benefiting local firms’ supply chains, the council said.
Local tech firms would receive further support from accelerated AI adoption across industries, including AI-powered personal computers, smartphones and smart vehicles, the council said.
Local firms have diversified their trade partners, cutting reliance on China, while increasing exports to the US and ASEAN markets to deal with China’s economic slowdown and growing US-China technology competition, it said.
The diversification strategy has gained solid progress, as shipments to China and Hong Kong account for 30 percent of total exports, while shipments to the US and ASEAN markets have grown to 41.9 percent, the council said.
Private investment and consumer spending would also lend support to GDP growth, it said.
Local and foreign investments continue to gain traction, with the “Invest Taiwan” initiative attracting more than NT$2.5 trillion (US$76.21 billion) in commitments as of Friday last week, the council said.
The government plans to extend the initiative until 2027 to sustain growth, it said.
In particular, local semiconductor firms are expanding advanced manufacturing and packaging facilities in a bid to reinforce their global leadership positions, it said.
At the same time, multinational tech firms are increasing investments in Taiwan, drawn by the nation’s advanced semiconductor ecosystem and AI-driven market opportunities, it said.
On the consumer side, stable employment, rising corporate revenues and wage hikes would boost purchasing power and support private consumption, it said.
However, the council recently spotted unfavorable signs — retreats in the council’s leading economic index series and the manufacturing purchasing managers’ index — which merit close monitoring, it said.
The nation’s economy is on track for steady growth, but global uncertainties and shifting trade dynamics would require proactive policy adjustments, if necessary, to keep the momentum going, it said.
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