Taiwan raises GDP forecast to 11%, fastest pace since 1987

Taiwan on Friday raised its full-year economic growth forecast to 11.05%, a pace that would mark the island's fastest expansion in nearly four decades, as relentless global demand for artificial intelligence technology continues to supercharge its chip-making economy.

AI Demand Drives Historic Upgrade

The Directorate General of Budget, Accounting and Statistics said gross domestic product is now expected to grow 11.05% in 2026, up from a previous estimate of 9.64% issued in May. The revised figure would represent the fastest growth since 12.75% was recorded in 1987 and the first year of double-digit expansion since 2010.bloomberg+2

The agency also revised second-quarter 2026 GDP growth slightly upward to 12.93% year-on-year, compared with a preliminary reading of 12.92%. For the first time, the bureau issued a 2027 forecast, projecting the economy would grow 6.04% next year.reuters+1

Successive Forecast Upgrades

Friday's upgrade is the latest in a series of upward revisions that have tracked the accelerating AI investment cycle. In November 2025, the statistics office had forecast just 3.54% growth for 2026. That was raised to 7.71% in February, then to 9.64% in May, and now to 11.05%. Taiwan's economy expanded 8.76% in 2025, itself a strong year powered by AI-related exports.investing+2

Taiwan plays a central role in fulfilling chip demand from tech giants such as Nvidia ↗ 0.54% and Apple ↗ 1.00%, as the island is home to Taiwan Semiconductor Manufacturing Co. ↗ 0.31%, the world's largest contract chipmaker. TSMC raised its own 2026 revenue outlook earlier this year, projecting growth of more than 30%.bloomberg+1

Structural Tailwinds

The sustained upgrades reflect what economists describe as structural benefits from AI for Taiwan's export-driven economy. Reuters reported that the boom in AI "has brought structural growth benefits to Taiwan's exports, which are both widespread and expected to be sustained". The Taiwan Institute of Economic Research has said the AI investment cycle could last at least 20 years.money.usnews+1

Despite the optimistic outlook, the deceleration implied by the 6.04% forecast for 2027 suggests officials expect a moderation from this year's extraordinary pace as base effects normalize.