According to the latest data released by Taiwan’s Directorate-General of Budget, Accounting and Statistics (DGBAS), Taiwan’s real GDP (year-on-year, unadjusted for seasonality) is estimated to have grown 5.37% in the first quarter of 2025, an increase of 1.91 percentage points compared to the February forecast of 3.46%.
Export and Capital Formation Drive Stronger Growth
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DGBAS attributed the higher-than-expected growth primarily to robust export performance—as global buyers accelerated orders to avoid potential tariffs under the new Trump administration—and stronger capital formation(including fixed investment and inventory changes).
While the ongoing tariff tensions with the U.S. have created economic uncertainty, global demand for artificial intelligence (AI) applications and emerging technologies has remained strong, significantly boosting Taiwan’s external sales.
Between January and March 2025, Taiwan’s exports of goods and services surged 20.11%, exceeding earlier projections by 10.13 percentage points, as many buyers rushed to stock up before tariff deadlines. Imports of goods and services also rose 23.66%, up 12.13 percentage points from previous estimates.
Investment Activity Strengthens Industrial Expansion
Based on updated trade data, DGBAS reported that net external demand contributed 1.03 percentage points to overall GDP growth in Q1.
The rise of emerging technologies has spurred domestic companies to ramp up investment and production capacity, with capital equipment imports soaring 73.51% in the first quarter. Overall capital formation—including private and public investments—grew 14.72%, surpassing the earlier forecast by 8.31 percentage points, as corporations expanded capital spending to meet strong global demand.
Consumer Spending and Government Expenditure Trends
Private consumption rose 1.22% in Q1, supported by Lunar New Year-related spending on food, beverages, entertainment, and other services. However, this growth was 0.88 percentage points lower than expected. Government consumption increased modestly by 0.53%, which was 1.57 percentage points below the previous estimate.
Economic Outlook for 2025
DGBAS noted that the temporary 90-day suspension of certain tariffs could continue to support Taiwan’s export-oriented economy during the first half of 2025, although uncertainty is expected to rise later in the year.
As of late February, DGBAS projected Taiwan’s full-year GDP growth at 3.14% for 2025. However, several research institutions have revised their forecasts downward to below 3%, citing potential impacts from the evolving U.S. tariff policy.