Taiwan's Central Bank Projects Growth in 2025 as AI Boosts Exports

The central bank of Taiwan increased its growth prediction for this year, but it also highlighted risks for the following year, primarily related to the trade policy of the incoming Trump government in the United States.

When it comes to the AI revolution, Taiwan's economy has profited from the vital role that domestic companies like chipmaker TSMC are playing.

However, Taiwan's reliance on commerce may make it susceptible to the universal import duties that U.S. President-elect Donald Trump has declared he will enact. He starts work on January 20.

After its quarterly board meeting, Taiwan's central bank issued a statement stating that it was "cautious" about potential changes in the global trade environment and that uncertainty around U.S. trade policy had significantly increased. The central bank also maintained the benchmark discount rate at 2% as anticipated.

The bank stated that it anticipated Taiwan's economy to maintain its growth momentum in the upcoming year, with the island's exports being further boosted by new technologies like the AI boom. However, it stated that the potential impact of changes in U.S. trade policy has not yet been taken into account in its 2025 GDP projection.

The central bank forecasted economic growth of 3.13 percent in 2025, up from its previous assessment of 3.08 percent, and increased its 2024 estimate to 4.25 percent from 3.82 percent in September.