TAIPEI (TVBS News) — Taiwan's economic expansion will moderate but remain resilient next year according to projections released Friday (June 13) by the Taiwan Research Institute (TRI, 台灣綜合研究院), a leading economic think tank on the island. The institute forecasts Taiwan's economy will grow by 2.9% in 2025, a cautious outlook reflecting mounting concerns about a potential global economic deceleration. Inflation pressures are expected to ease significantly, with the consumer price index (CPI) projected to increase by just 1.98%, dropping below the central bank's 2% threshold that typically triggers monetary policy interventions.
The economic analysis highlights Taiwan's unexpectedly robust export performance during the first six months of 2025, attributed primarily to companies stockpiling components ahead of anticipated tariff implementations and a revitalized global semiconductor industry where Taiwan maintains dominant market position. Advanced technologies, particularly artificial intelligence applications and high-performance computing (HPC) cloud services, are powering what economists project will be a substantial 9.82% expansion in real exports of goods and services. This technological momentum has simultaneously stimulated domestic business confidence, with private sector investment anticipated to grow by 4.54% as companies expand production capacity to meet international demand.
Wu Tsai-yi (吳再益), who serves as president of the institute, cautioned that Taiwan's economy faces its most significant tests in the latter half of 2025, when international tariff negotiations reach conclusion and the temporary boost from emergency inventory building naturally dissipates. During the presentation of the forecast, Wu emphasized the precarious nature of the global economic environment, identifying several external factors that could substantially impact Taiwan's export-dependent economy. These vulnerabilities include fluctuating U.S.-China diplomatic and trade tensions, potential currency instability across major Asian markets, and the ripple effects of monetary policy adjustments by central banks in leading economies around the world.
Economists at the institute expressed particular concern about weakening domestic spending patterns, projecting a modest 1.50% increase in real private consumption for 2025 as heightened global trade uncertainties and financial market fluctuations erode consumer confidence across Taiwan. Liu Tai-ying (劉泰英), the influential founder of the Taiwan Research Institute and former financial advisor to previous administrations, specifically addressed the economic implications of U.S. political dynamics. Liu pointed to what he characterized as the unpredictable policy approaches of U.S. President Donald Trump, suggesting that this unpredictability introduces additional layers of complexity and uncertainty into global economic forecasting models.
To counter these external vulnerabilities, Liu proposed a strategic economic pivot focusing on strengthening Taiwan's internal market dynamics, particularly by redirecting the island's considerable accumulated savings into domestic investment opportunities rather than foreign markets. The veteran economist specifically advocated for major infrastructure development as an economic stabilizer, recommending the government prioritize extending the Taiwan High Speed Rail (THSR,高鐵), the island's bullet train network currently serving only western population centers, to reach Taiwan's less-developed eastern coastal regions. Such an expansion, Liu argued, would serve multiple economic objectives: reducing the persistent economic imbalance between Taiwan's prosperous west and rural east, stimulating regional economic activity in underdeveloped areas, and providing a cushion against unpredictable external economic shocks. ◼