Taiwan's real GDP growth surged to 12.68% y/y in 4Q25, marking its fastest pace since 3Q87. The robust performance was driven by strong global demand for Taiwan's electronic components and ICT exports. The economy is projected to continue outperforming in 2026, with a GDP growth forecast of 3.5%, potentially increasing to around 5%, notes Ho Woei Chen, CFA, from UOB.

Export demand fuels growth outlook

"The sustained strength in export demand suggests that Taiwan’s economy could continue to outperform this year. Latest data showed Taiwan’s export orders rising by 43.8% y/y in Dec – fastest pace in nearly five years despite the increasingly high base."

"Taiwan’s trade deal with the US in Jan which lowers reciprocal tariffs on Taiwan goods to 15% from 20% in return for Taiwanese investments in the US, has helped ease policy uncertainty and placed Taiwan on a level competitive footing with Japan, South Korea, and the European Union."

"Despite elevated geopolitical tensions and persistent uncertainties surrounding US trade policy, we assess that the balance of risks to our 2026 GDP growth forecast — currently 3.5% — is tilted meaningfully to the upside, at around 5% which we will finalise after the release of the preliminary 4Q25 GDP on 13 Feb."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)