2026 Full-Year Estimate at 12.34%, Double-Digit Growth in First Three Quarters
The Taiwan Institute of Economic Research held its 2027 economic outlook and industry trends seminar on the 9th, releasing its latest economic forecast. Benefiting from the continued artificial intelligence investment boom, which boosted domestic and foreign demand for semiconductors, servers and electronic components, exports and domestic demand were lifted. According to TIER, economic growth in the first three quarters of this year was 15.43%, 12.93% and 14.36% respectively, with Q4 estimated at 7.35%, bringing full-year GDP growth to 12.34%, higher than 8.63% in 2025.
High Base Slows Pace, 2027 Growth Estimated at 6.45%
Looking ahead to 2027, TIER expects cloud service providers to continue investing in AI infrastructure, but as AI business has been on a high base for two consecutive years, coupled with geopolitical uncertainty and a more cautious stance toward AI construction after the Democratic Party's big win in the U.S. midterm elections, growth will slow from 2026, with full-year GDP growth estimated at 6.45%, still maintaining steady growth.
Chang Chien-Yi: AI Slowdown Is Not a Bad Thing, Short-Term Bearish but Long-Term Bullish
TIER President Chang Chien-Yi said recent market concerns over high AI build-out costs, slower revenue payback and financing problems have led to a correction in related stocks, and AI will still grow next year but at a slower pace. After the U.S. midterm elections, controversies over AI development will become a focus for states and members of Congress, but will not bring AI to a complete halt. He said the previous investment arms race has made the stock market overreact to any disturbance, with actual conditions often less severe than expected, and the current phase is short-term bearish but long-term bullish, so an AI slowdown is not a bad thing. He noted that AI data center-related orders have been placed and permits issued, so the impact in the first half of the year will be limited, while the second half remains to be seen.
Four Reasons for Prices, Next Year Depends on Persian Gulf and AI Applications
Sun Ming-Te, director of the Economic Forecasting Center, pointed out that the global economy in 2026 is being pulled by two forces: one is the Iran war disrupting shipping through the Strait of Hormuz, pushing up international energy prices and global inflation, and the other is AI-driven tech expansion, with strong U.S. investment plus robust exports from Taiwan and South Korea offsetting part of the war impact. He attributed rising prices to four reasons, including the Iran war not ending in the short term, AI-driven price hikes in consumer electronics, a super El Nino and deglobalization, with oil prices rising this year and food prices rising next year, making it hard for prices to fall back in the short term. The key next year is whether transportation in the Persian Gulf resumes and whether better AI applications emerge.
Subsidies for Taipower and CPC to Stabilize Prices and Exchange Rate
Regarding the state-owned enterprise subsidy budget under review in the Legislative Yuan, Chang Chien-Yi said Taipower and CPC have long served as a breakwater for prices, absorbing international energy price hikes, and if electricity and fuel prices fully reflected costs, the consumer price index could exceed 3%, possibly requiring the central bank to raise interest rates in December. Stable subsidies will help stabilize domestic prices. As for the New Taiwan dollar exchange rate, he said that in theory strong economic growth and foreign capital inflows should push up the exchange rate, and with U.S. dollars currently mostly in the hands of exporters, the central bank's verbal commitment to stabilizing the exchange rate will help keep the Taiwan dollar steady.