Taiwan posts 8.63% GDP growth in 2025; government forecasts 4.56% in 2026

Taiwan’s economic growth in 2025 defied expectations amid global uncertainties, with GDP expanding at its fastest pace in 15 years and a quarter-on-quarter leap unseen in 38 years. Officials have forecast growth of 4.56% for 2026.

Record-breaking growth in context

Taiwan’s economy delivered a historic performance in 2025, with gross domestic product (GDP) estimated to have grown 8.63% year-on-year — the highest annual pace since 2010 — according to the Directorate General of Budget, Accounting and Statistics (DGBAS), a government branch of Taiwan’s Executive Yuan.

Q4 alone saw GDP expand by 12.68%, a figure not observed in nearly 38 years, underscoring an acceleration that far outpaced earlier forecasts. 

This robust expansion came even after analysts had repeatedly revised their outlooks upward, signaling how dramatically Taiwan’s economy outperformed consensus expectations, per ING, the global financial institution of Dutch origin.

Drivers behind the surge

Export demand lay at the heart of Taiwan’s strong growth. The island’s position in global technology supply chains — particularly in semiconductors and advanced computing hardware — propelled shipments overseas, a trend amplified by rising global investment in artificial intelligence (AI) applications.

Goods exports in Q4 climbed nearly 50% year-on-year, surpassing many forecasts and highlighting the importance of Taiwan’s manufacturing sector in fulfilling global tech demand.

Imports also surged, reflecting businesses’ increased procurement of raw materials and production tools as firms expanded capacity to meet global orders.

DGBAS official Chiang Hsin-yi (江心怡) told the press that domestic demand also contributed, albeit more modestly, to growth. Private consumption rose, supported by an enhanced goods tax reduction program and the government’s universal cash handout policy, per Economic Daily News.

Per capita income and global comparison

The strong performance was reflected not only in headline growth figures but also in living-standard metrics. Taiwan’s estimated per capita GDP reached US$39,477 in 2025, surpassing those of Japan and South Korea.

Taiwan’s 2025 growth rate also exceeded those of several regional economies, including China (5%), Singapore (4.8%), and Hong Kong (3.5%), underscoring the impact of its export-oriented industrial base.

Looking ahead: The 4.56% ambition and potential risks

Buoyed by last year’s performance, Taiwan’s policy planners set a growth forecast of 4.56% for 2026 on Feb. 3. The National Development Council (NDC) cited continued strength in AI-related sectors, investment, and exports.

However, the NDC highlighted that geopolitical and external trade risks could temper this outlook. Uncertainties surrounding global supply chains, shifting trade policies, particularly with the United States and China, and broader geopolitical tensions including political risks from China remain salient concerns that could influence investment sentiment and export performance.

How people feel on the ground

Some workers interviewed by TCN said they do not feel they are benefiting from headline growth.

An occupational therapist named Sharon said that she has a strong feeling that the “economic boom” of Taiwan highly concentrates in certain sectors in tech. She further stated that as the “overall economy” thrives and the cost of living goes up, she feels that she is being somehow left behind despite holding a job traditionally deemed stable and working long hours diligently.

Emma, a Taipei-based registered nurse said that in her own circle, licensed healthcare professionals who she repeatedly said to have sacrificed significantly and contributed to the community, are not benefiting from the GDP growth of Taiwan. She elaborated that many nurses are thinking about a career change or moving abroad to serve in other countries based on, among others, economic considerations.

A Japanese MBA graduate of a Taiwanese university — who wished to remain anonymous for privacy concerns — told TCN that he left Taiwan for Japan in late 2025, after briefly working in Taiwan after graduation. He said he took a job in Japan for similar work but significantly higher pay.

Economist and Associate Professor at the Taipei-based Shih Hsin University, Liu Yu-hsi (劉玉晳), told TCN that although many ordinary citizens do not perceive themselves as affluent, statistics suggest Taiwan has a sizable wealthy population.

She said that affluent households often channel their capital into higher-yield opportunities overseas, resulting in significant outflows rather than domestic reinvestment. When funds do remain onshore, she added, they are frequently funneled into real estate, a pattern that allows those with existing wealth to become even wealthier.

She said that those without assets could not accumulate further wealth this way. As the wealth gap widens, this dynamic has contributed to a growing sense among the general public in Taiwan that strong economic growth, in terms of GDP, has little bearing on their daily lives.

On the other hand, Alan Hellawell, an American practitioner who also teaches at a university in Taiwan told TCN that people must keep in mind that income gap and inequality in wealth distribution are global phenomena not unique to Taiwan, and that they plague many countries in the world.

He said that when he compares what he sees in the US and in Taiwan, he does not believe that Taiwan's economic inequality is significantly higher, at least not from what he personally observes on the ground.

A young local professional working in insurance named Lu told TCN that she, from her experience in both personal and professional settings, believes that Taiwan is going on the right path with potentials for an even more prosperous future.

Though she does not work in semiconductors, AI, or high tech, she said she remains optimistic about Taiwan’s future and investment prospects, adding that airports and restaurants she visits are often crowded with Taiwanese who seem to have “no worries about money.”