Yeh Chun-hsien: AI, Consumption, and Revival of Traditional Industries Could Push Economic Growth Above 10%

According to a report by Central News Agency journalist Pan Tzu-yu from Taipei on the 17th, the Directorate-General of Budget, Accounting and Statistics (DGBAS) revised Taiwan's 2025 economic growth forecast upward to 9.64% at the end of May, the highest level in 16 years. National Development Council (NDC) Chairperson Yeh Chun-hsien stated during a media exchange today that, supported by three key factors—particularly robust AI demand—this year's economic growth rate has a real chance of surpassing 10%. He also emphasized that growth this year is more balanced compared to last year.

In February, the NDC set its annual policy targets, aiming for a 4.56% economic growth rate and a per capita GDP of USD 42,170.

However, artificial intelligence (AI) demand has exceeded expectations, prompting domestic institutions to successively raise their full-year economic growth forecasts. The DGBAS estimates 2025 economic growth at 9.64%, the Taiwan Institute of Economic Research (TIER) revised its forecast to 9.33%, and Cathay United Bank projects growth could approach 10%.

Yeh shares this optimistic outlook, stating that surpassing 10% is "certainly possible," citing three main supporting factors.

First, strong AI demand is driving global cloud service providers (CSPs) to continuously expand capital expenditures, boosting Taiwan's exports to record highs. Yeh noted that AI applications are rapidly expanding from cloud infrastructure to end-user devices such as PCs, smartphones, and notebooks—faster than anticipated. If this trend extends further into autonomous vehicles and robotics, it will generate even more growth momentum.

Second, this year's economic growth is more balanced than last year's, with consumption emerging as another key driver. Yeh explained that last year's auto sales were sluggish due to tariff disputes, but this year, the automotive market has rebounded, and overall consumer momentum has improved.

Third, due to adjustments in U.S. trade policies, certain industries with relative competitive advantages or those benefiting from order shifts—such as traditional industries and aerospace-related sectors—are expected to outperform expectations. Industry representatives have reported that "conditions aren't worse than before and are gradually improving."

Given these factors, Yeh believes Taiwan's economic growth rate this year indeed has a chance to exceed 10%. Additionally, as geopolitical tensions in the Middle East ease, inflationary pressures are expected to subside.

Yeh stated that Middle Eastern conflicts previously pushed up international energy prices, creating imported inflation pressure. However, Taiwan's government policy of source management has proven effective. With geopolitical risks now diminishing, the consumer price index (CPI) increase for this year should be contained around 2%. Even if it slightly exceeds 2%, he considers it a reasonable outcome, especially given Taiwan's two consecutive years of high economic growth. As long as the economy grows steadily and prices rise moderately, this is a rational phenomenon. (Edited by Yang Lan-hsuan)