Taiwan Q1 GDP Growth Beats Expectations

Taiwan’s economy grew by 13.69% year-on-year in Q1 2026, accelerating from 12.65% in Q4 2025 and beating market expectations of an 11.3% gain, preliminary estimates showed. It also marked the strongest economic expansion since Q4 1986, continuing to be supported by robust demand for AI technologies and related infrastructure, despite lingering risks stemming from Middle East tensions that could threaten the momentum. Domestic demand surged to 4.83% vs 0.86% in Q4 2025, driven by stronger household consumption (4.89% vs 3.45%) and government spending (3.91% vs 0.75%), alongside a sharp rebound in gross capital formation (5.2% vs -3.39%). On the external front, exports of goods and services eased to 35.35% vs 38.81%, while imports rose to 27.07% vs 24.59%. On a seasonally adjusted quarterly basis, Taiwan’s economy moderated to 2.84% in Q1 2026 from 5.43% growth in the previous quarter.

Taiwan’s economy expanded 12.65% year-on-year in Q4 2025, slightly below preliminary estimates of 12.68%, but accelerating from an upwardly revised 8.42% in the previous quarter. This marked the fastest economic growth since Q3 1987, fueled by robust external demand in emerging technologies such as AI. Exports of goods and services climbed to 38.81% from 30.63% in Q3, while imports rose to 24.59% from 24.21%. Moreover, household consumption jumped to 3.45% from 0.72%, and government spending increased to 0.75% from 0.32%. In contrast, gross fixed capital formation slowed sharply to 3.48% from 10.14%. On the production side, the manufacturing sector recorded strong growth of 13.01%, mainly due to output expansions in semiconductors, computers, electronics, and optical products. On a quarterly seasonally adjusted basis, GDP rose 5.43% in Q4, missing preliminary estimates of 5.52% but up from 1.79% in Q3. For the entire year of 2025, GDP grew 8.68%.

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%.