Standard Chartered has upgraded its GDP growth forecasts for Taiwan, citing robust AI-related export strength and a recovery in domestic demand as key drivers. According to Tommy Wu of Standard Chartered, the bank now projects Taiwan's GDP to grow by 11.5% in 2026, up from its previous estimate of 9.5%, and by 6.5% in 2027, compared to the earlier forecast of 5.0%. These projections are slightly above the government's estimates, with the 2027 forecast surpassing the government's 6.04% figure [1].
The bank attributes the upgrade to faster-than-expected growth in the second quarter, primarily fueled by AI-driven demand and improving domestic consumption. Standard Chartered expects the ongoing AI supercycle to continue supporting economic expansion, with positive spillovers into consumer spending. However, the bank notes that the year-on-year growth pace is likely to slow sharply from the fourth quarter onwards due to high base effects impacting exports and GDP [1].
Despite the optimistic growth outlook, Standard Chartered is maintaining its inflation outlook and expects only moderate demand-pull inflation risks. The bank also reiterates its forecast for two additional 12.5 basis point rate hikes by Taiwan's central bank (CBC), scheduled for December 2026 and March 2027, which would raise the discount rate from the current 2.00% to 2.25% [1].
Standard Chartered further highlights Taiwan's competitive advantage in high-end chipmaking, suggesting that any potential new US tariffs should have a limited impact on the country's economy [1].
CONCLUSION
Standard Chartered's upward revision of Taiwan's GDP forecasts underscores the significant impact of AI-driven exports and a strengthening domestic economy. The bank's outlook suggests continued economic momentum, tempered by expectations of slower growth later due to base effects, and a measured approach to monetary tightening. Taiwan's resilience in high-end chipmaking is expected to mitigate risks from potential external trade pressures.