Taiwan’s Economy Seen on an Even Keel, with Exports Poised to Grow in the First Quarter

Taiwan’s Ministry of Finance said economic activity has remained stable since mid-2025 and is expected to follow a similar trajectory this year, with exports likely to post solid growth in the first quarter. The outlook is underpinned by rising demand for infrastructure and hardware driven by artificial intelligence, as well as a recent consensus reached in tariff negotiations between Taiwan and the United States, which should help sustain external demand.

In its latest briefing on trade and tax conditions, the ministry cited forecasts from the International Monetary Fund and World Bank, which project global economic growth of 3.3% and 2.7% respectively in 2026, broadly in line with the steady pace seen in 2025. As the effects of early stockpiling fade and tariff-related headwinds become more apparent, both the IMF and the World Bank expect global trade growth to slow this year, to 2.6% and 2.2%.

Taiwan’s recent performance has been notably robust. Exports in the fourth quarter of 2025 surged by 49.4% year on year, while both exports and imports for the full year reached record highs. Manufacturing output and industrial production indices also climbed to new peaks in the fourth quarter, with full-year growth of 17.9% and 16.7%, which may mark the fastest growth since 2011.

Looking ahead, the ministry cautioned that global growth remains reliant on a narrow set of drivers, with uneven expansion across economies and industries. Geopolitical risks and uncertainty over whether AI investment will meet expectations could yet cloud the outlook. Even so, Taiwan’s strong position in global supply chains, coupled with AI demands and easing trade frictions with the United States, is expected to keep export momentum intact in the early months of the year.