IMF lifts Taiwan's 2026 growth outlook as AI chip demand fuels surge

At the IMF and World Bank annual gatherings in Bangkok, the fund increased its forecast for Taiwan's 2026 economic expansion to 10.7%, a sharp rise from the 5.2% estimate made in April, making Taiwan the only economy projected to achieve double-digit growth. The boost is driven primarily by soaring demand for AI chips, which is energising the island's semiconductor sector. Economists present at the meetings highlighted the need for Taiwan to use the additional fiscal space to develop non-technology industries and broaden its job market.

They warned that excessive optimism about AI could lead to asset-price bubbles and potential market corrections if the technology fails to deliver. While the short-term outlook appears favorable, long-term resilience will depend on how effectively Taiwan diversifies its economic base.