Taiwan: Growth outlook upgraded – Standard Chartered

Standard Chartered’s Tommy Wu raises Taiwan’s GDP growth forecasts, projecting 11.5% in 2026 and 6.5% in 2027, both slightly above government estimates. The upgrade is driven by AI-related export strength and recovering domestic demand. The bank expects the AI supercycle to persist, with spillovers into consumer spending, while keeping CPI forecasts and its path of two 12.5bp CBC rate hikes unchanged.

AI exports and domestic demand support

"We raise our GDP growth forecasts to 11.5% (from 9.5% prior) in 2026 and to 6.5% (from 5.0%) in 2027 K-shaped divergence may become less pronounced as the tech boom spills over to consumer spending Signs of strengthening domestic demand point to rising (but not excessive) risk of demand-pull inflation We maintain our view of two more 12.5bp rate hikes, in December 2026 and March 2027 each Taiwan’s edge in high-end chipmaking means any potential new US tariffs should have a limited impact."

"Our upgrade largely reflects faster-than-expected Q2 growth, fuelled by AI-driven demand and a recovery in domestic demand, though we expect the y/y pace to drop sharply from Q4 onwards as high base effects weigh on exports and GDP."

"We increase our 2027 growth forecast to 6.5% (5.0% prior), versus the government’s 6.04%, as we expect the AI supercycle to be sustained."

"We maintain our forecast of two 12.5bp hikes by Taiwan’s central bank (CBC) in December 2026 and March next year, to take the discount rate to 2.25% (from 2.00% currently)."