By Crystal Hsu
/ Staff reporter
Cathay Financial Holding Co (國泰金控) sharply raised its GDP growth forecast for Taiwan this year to 10.1 percent yesterday, nearly doubling its previous estimate of 5.8 percent made in March, as a stronger-than-expected surge in exports and investment has pushed the economy into a powerful expansion phase.Taiwan’s economy is now "almost entirely driven” by artificial intelligence (AI) demand, as capital expenditure by global cloud service providers continues to climb, National Chengchi University economics professor Hsu Shih-hsun (徐士勛), speaking for Cathay Financial’s research team, said at a news conference in Taipei.Hsu said the March forecast had factored in headwinds from global trade tensions, tariff risks and geopolitical shocks, but that subsequent developments had far exceeded expectations.
National Chengchi University economics professor Hsu Shih-hsun, center, Cathay Financial Holding Co economic research department assistant manager Achilles Chen, second right, and other research team members pose for a photograph at a news conference in Taipei yesterday.
AI-related spending has continued to accelerate, supporting Taiwan’s exports of semiconductors, advanced chip packaging and other electronic components, he said. This has shaped a growth profile that differs markedly from previous technology-led cyclical recoveries, he added.Taiwan last recorded growth above 10 percent in 2010 during the post-global financial crisis rebound, while the post-COVID-19 pandemic recovery peaked at around 6 percent, Hsu said. As a result, the current outlook is potentially the strongest in more than 16 years, he said.
