Taiwan raises 2024 economic growth forecast, Trump tariffs may crimp 2025
2024 GDP estimate raised to +4.27% vs previous +3.9%
2025 GDP estimate +3.29%
2025 exports seen at +5.98% y/y
2025 CPI projected at +1.93% y/y
Analyst sees 2025 GDP forecast too optimistic
Recasts, adds government, analyst comments in paragraph 5, 6, 9
By Faith Hung and Jeanny Kao
TAIPEI, Nov 29 (Reuters) -Taiwan's trade-driven economy is expected to grow faster in 2024 than previously forecast thanks to the AI boom that has boosted demand for tech products, the statistics office said on Friday, but new U.S. tariffs could curb growth next year.
Home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC) 2330.TW, TSM.N, the island is a key link in the global technology supply chain for companies such as Apple AAPL.O and Nvidia NVDA.O.
Gross domestic product (GDP) is now expected to expand by 4.27% this year, the Directorate General of Budget, Accounting and Statistics said, higher than the 3.9% forecast it released in August.
"The AI boom has kicked off exports of our electronics and telecommunication products. However, traditional goods exports are still soft due to over-capacity," the statistics office said in a statement.
"China has taken loose monetary policy and fiscal policy to boost its economy, but its property market remains weak. That and escalating U.S.-China tensions have weighed and will continue to weigh on growth momentum," the statement added.
For 2025, the statistics office now forecasts GDP to grow 3.29%, above the 3.26% previously predicted.
Some analysts said the forecast might be too optimistic, given threats of across the board import tariffs by U.S. President-elect Donald Trump, who takes office in January.
"Trump's new policies will start having an impact next year, but our forecast is that the implementation will come sooner," said Achilles Chen, an economic analyst at Cathay Financial.
However, statistics agency official Huang Yao-min said the island may only start to see the impact of any Trump tariffs from 2026.
The statistics agency sees 2025 exports growing 5.98% on year. It forecast the 2025 consumer price index at 1.93%, which would be slightly below the central bank's 2% target but slightly higher than the 1.85% forecast for this year.
The agency also revised third quarter economic growth upwards to 4.17%, compared with a preliminary 3.97%.
For 2023, the economy grew 1.31%.
Reporting by Faith Hung and Jeanny Kao; Additional reporting by Emily Chan; Editing by Jacqueline Wong, Ben Blanchard, Mark Heinrich and Kate Mayberry
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
