Taiwan Q3 GDP Growth Exceeds Expectations

The Taiwanese economy expanded 12.68% year-on-year in Q4 2025, far exceeding market expectations of 8.5% and accelerating sharply from 8.21% in the previous quarter. It marked the strongest pace of growth since Q3 1987, driven primarily by stronger-than-anticipated external demand, fueled by emerging technologies such as artificial intelligence (AI). Exports of goods and services soared 38.82% from 31.95% in Q3, while imports eased to 24.6% from 26.09%. Moreover, household consumption rose 3.43% from 1.19%, supported by increased spending on information and communications, entertainment, transportation, outbound tourism, and higher securities transaction fees amid a booming stock market. In contrast, gross capital formation declined 3.83%, reversing a 0.16% increase. On a seasonally adjusted quarterly basis, GDP expanded 5.52%, accelerating from a revised 1.71% rise in the previous quarter. For 2025, preliminary estimates indicate that Taiwan’s economy grew 8.63%.

Taiwan’s annual economic growth in Q3 2025 was revised up to 8.21% from an initial estimate of 7.64%, accelerating from a downwardly revised 7.71% in Q2. The expansion was the fastest since Q2 2021, driven by a 31.95% surge in exports (vs 36.26% in Q2), supported by emerging technologies such as artificial intelligence (AI) and strong demand for new consumer electronics products. Imports also rose sharply, increasing 26.09% (vs 32.99%). Private consumption accelerated (1.19% vs 0.17%), while growth moderated in government spending (0.3% vs 3.25%) and gross fixed capital formation slowed (9.34% vs 11.51%). On the production side, Taiwan’s manufacturing sector expanded 13.44% in Q3 2025, led by output growth in semiconductors, computers, electronics, and optical products. On a seasonally adjusted basis, GDP rose 1.71% quarter-on-quarter, following a 2.54% expansion in the previous quarter.

Taiwan’s economy grew by 7.64% year-on-year in the third quarter of 2025, surpassing market expectations of 6% growth but easing from the four-year high of an 8.01% expansion in the previous quarter, advance estimate showed. Still, this marked the tenth consecutive period of economic expansion, significantly supported by the global surge in AI development. Taiwan’s dominance in advanced semiconductor and server production has positioned it as a key beneficiary of AI-related demand, reflected in record export figures in August. Domestic demand slowed to 0.49% from 2.23% in Q2, as the government spending (0.08% vs 2.85%) slowed despite stronger household consumption (0.92% vs 0.49%). On net external demand, exports of goods and services soared 30.64% in Q3, outpacing a 25.27% increase in imports. On a seasonally adjusted quarterly basis, GDP expanded 1.31%, moderating from the 3.05% growth recorded in the second quarter.