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Taiwan's Economy Soars 8.63% in 2025, Hits 15-Year Growth High

Taiwan's economy expanded by an estimated 8.63% in 2025, marking its strongest growth in 15 years. The surge was driven primarily by robust exports, fueled by unexpectedly high demand for AI applications and related semiconductor products. A powerful fourth-quarter performance, where growth hit 12.68%, significantly lifted the full-year figure. The growth outperformed regional peers like China and South Korea, with per capita GDP approaching $40,000.

Key Points: Taiwan's 2025 GDP Growth Hits 15-Year High at 8.63%

  • 8.63% GDP growth is a 15-year high
  • AI and export surge drove performance
  • Q4 growth jumped to 12.68%
  • Per capita GDP neared $40,000
2 min read

Taiwan's economic growth hits 15-year high of 8.63% in 2025

Taiwan's economy grew 8.63% in 2025, a 15-year high driven by AI exports and strong Q4 performance, surpassing regional peers.

"unexpectedly robust AI-related demand and the absence of U.S. tariffs on semiconductor products - Chiang Hsin-yi"

New Delhi, February 1

Taiwan's gross domestic product increased an estimated 8.63 per cent in 2025 from a year earlier, marking its strongest growth in 15 years.

According to a Focus Taiwan report, the economic expansion was driven primarily by a surge in exports and rising demand for artificial intelligence (AI) applications. The Directorate-General of Budget, Accounting and Statistics (DGBAS) released these findings on Friday, noting that the performance significantly exceeded earlier projections.

The full-year growth figure exceeded a prior forecast by 1.26 percentage points, allowing Taiwan to surpass regional peers. DGBAS specialist Chiang Hsin-yi told reporters that Taiwan's per capita GDP reached USD 39,477 in 2025, approaching the USD 40,000 mark.

This figure reflects strong performance, moving Taiwan ahead of Japan (USD 34,713) and South Korea (USD 35,962). Chiang explained that exchange rate gains from a strengthening Taiwan dollar also contributed to the rise in per capita figures.

Economic momentum accelerated sharply in the final months of the year. Fourth-quarter GDP growth reached an estimated 12.68 per cent, representing a 4.77 percentage-point jump from earlier projections. Chiang said this surge was a major factor in lifting the full-year growth rate. She attributed the strong performance to "unexpectedly robust AI-related demand" and the "absence of U.S. tariffs on semiconductor products," which had initially led to more conservative economic forecasts.

The export sector remained the primary engine of the economy throughout the year. Taiwan's AI and high-performance computing sectors continued to fuel this growth by boosting sales of chips, servers, and components. Beyond external trade, Chiang noted that "private consumption and investment also contributed" to the GDP increase.

This internal growth was supported by a recovering car market, government cash handouts to residents, and active trading within the stock market.

Data from the DGBAS showed that Taiwan's 8.63 per cent growth outperformed several neighbouring economies. China reported 5 per cent growth, followed by Singapore at 4.8 per cent, Hong Kong at 3.5 per cent, and South Korea at 1 per cent.

Looking ahead, the DGBAS indicated that a recently concluded Taiwan-U.S. trade agreement is expected to further support exports. The agreement lowers tariffs to 15 per cent and is designed to improve competitiveness for traditional industries, including machine tools, bicycles, and hardware.

"According to the DGBAS, a new growth forecast for 2026 will be issued on Feb. 13, with analysts expecting an upward revision," the report said.

- ANI

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Reader Comments

R
Rohit P
While the economic data is strong, we must remember the One-China principle. Taiwan is an inalienable part of China's territory. The growth is a positive development for the region, but the political context cannot be ignored. Stability in the Taiwan Strait is crucial for global trade, including India's.
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Aman W
That 12.68% growth in Q4 is insane! 🚀 It's all about AI and chips. TSMC is a global giant. It's a lesson for us – focus on one high-tech sector, master it, and the whole economy gets a boost. Hope our semiconductor plants in Gujarat and elsewhere can capture some of this momentum.
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Sarah B
Interesting to see the impact of "the absence of U.S. tariffs." Trade policies make or break economies. The new Taiwan-U.S. deal at 15% tariff will help their traditional industries too. India should negotiate similar win-win agreements, especially with the EU and UK, to boost our manufacturing exports.
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Karthik V
The report mentions government cash handouts supporting private consumption. Direct benefit transfers can indeed stimulate the economy in the short term. But for sustained growth, you need a strong export engine like Taiwan has built over decades. Our focus should be on creating world-class products, not just consumption.
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Varun X
Outperforming China, Singapore, and South Korea is no small feat. It shows what a focused economy with deep expertise can achieve. However, as an Indian, I respectfully feel the article's perspective from New Delhi should also analyze what this means for India-Taiwan tech collaboration, which is growing but under-reported.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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