Standard Chartered: Middle East Conflict Impact, Beware of Economic Slowdown Risk in Second Half
Despite Taiwan's Q1 economic growth reaching a nearly 39-year high, Standard Chartered warns that the economy may face a slowdown risk in the second half of the year due to the Middle East conflict, with particular attention to energy costs and a global demand decline.
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- 📰 Published: May 4, 2026 at 16:50
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Central News Agency
(Central News Agency reporter Lu Yen-tzu, Taipei, 4th) Taiwan's first-quarter economic growth reached its highest level in nearly 39 years. Standard Chartered Group stated today that even if overall artificial intelligence (AI) demand remains strong, economic growth in the second half of the year may still face the risk of slowing down. Attention must be paid to the impact of the Middle East conflict on energy, import input costs, and a slowdown in global demand.
The Directorate-General of Budget, Accounting and Statistics announced at the end of April that the estimated economic growth for the first quarter of this year was 13.69%, an increase of 2.23 percentage points from the forecast in February, and the highest single-quarter level since the third quarter of 1987, nearly 39 years ago.
In addition, the Ministry of Economic Affairs announced that export orders in March were 91.12 billion US dollars, a high year-on-year increase of 65.9%. Hubert Ho, Senior Economist for Greater China and North Asia at Standard Chartered Group, issued a commentary today stating that Taiwan's strong GDP growth in the first quarter was mainly driven by export growth brought about by AI-driven demand, and that the "AI super cycle" should continue to support Taiwan's economic growth.
Ho analyzed that the growth in export orders was mainly driven by demand for electronic products and information and communication products, with year-on-year growth rates of 73.7% and 120.9% respectively, which also indicates that economic growth in the second quarter of this year may still be strong.
However, Ho reminded that the second-round impact of the Middle East conflict may start to become more obvious in the second half of this year. Although the chip manufacturing industry will be relatively less affected due to strong AI-related demand, price-sensitive industries will be under pressure.
According to the latest data from the Directorate-General of Budget, Accounting and Statistics, the Producer Price Index (PPI) in March rose by 2.53% year-on-year. Ho explained that this mainly reflects the increase in oil and gas prices. As for other components of the Producer Price Index, there have been no significant signs of rising inflation yet.
Ho said that despite this, the second-round impact of import input costs may become apparent in the coming months. At that time, traditional industries including textiles, metals, machinery and tools, transportation equipment, food processing, plastics, and chemicals will face the dual challenges of rising costs and a potential slowdown in global demand.
Ho said that this also means that even if overall AI demand remains strong, economic growth in the second half of the year may still face the risk of slowing down. In addition, the high base effect from last year will also put pressure on GDP growth data in the second half of the year. He believes that the impact of the Middle East conflict on energy, import input costs, and a slowdown in global demand still needs to be considered. (Edited by Yang Kai-hsiang) 1150504
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(Central News Agency reporter Lu Yen-tzu, Taipei, 4th) Taiwan's first-quarter economic growth reached its highest level in nearly 39 years. Standard Chartered Group stated today that even if overall artificial intelligence (AI) demand remains strong, economic growth in the second half of the year may still face the risk of slowing down. Attention must be paid to the impact of the Middle East conflict on energy, import input costs, and a slowdown in global demand.
The Directorate-General of Budget, Accounting and Statistics announced at the end of April that the estimated economic growth for the first quarter of this year was 13.69%, an increase of 2.23 percentage points from the forecast in February, and the highest single-quarter level since the third quarter of 1987, nearly 39 years ago.
In addition, the Ministry of Economic Affairs announced that export orders in March were 91.12 billion US dollars, a high year-on-year increase of 65.9%. Hubert Ho, Senior Economist for Greater China and North Asia at Standard Chartered Group, issued a commentary today stating that Taiwan's strong GDP growth in the first quarter was mainly driven by export growth brought about by AI-driven demand, and that the "AI super cycle" should continue to support Taiwan's economic growth.
Ho analyzed that the growth in export orders was mainly driven by demand for electronic products and information and communication products, with year-on-year growth rates of 73.7% and 120.9% respectively, which also indicates that economic growth in the second quarter of this year may still be strong.
However, Ho reminded that the second-round impact of the Middle East conflict may start to become more obvious in the second half of this year. Although the chip manufacturing industry will be relatively less affected due to strong AI-related demand, price-sensitive industries will be under pressure.
According to the latest data from the Directorate-General of Budget, Accounting and Statistics, the Producer Price Index (PPI) in March rose by 2.53% year-on-year. Ho explained that this mainly reflects the increase in oil and gas prices. As for other components of the Producer Price Index, there have been no significant signs of rising inflation yet.
Ho said that despite this, the second-round impact of import input costs may become apparent in the coming months. At that time, traditional industries including textiles, metals, machinery and tools, transportation equipment, food processing, plastics, and chemicals will face the dual challenges of rising costs and a potential slowdown in global demand.
Ho said that this also means that even if overall AI demand remains strong, economic growth in the second half of the year may still face the risk of slowing down. In addition, the high base effect from last year will also put pressure on GDP growth data in the second half of the year. He believes that the impact of the Middle East conflict on energy, import input costs, and a slowdown in global demand still needs to be considered. (Edited by Yang Kai-hsiang) 1150504
Choose to stand with the facts, every sponsorship you make is a force to protect press freedom.
Download Central News Agency's "First-hand News" APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, broadcast, transmitted, or used without authorization.
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