The tech boom amid the AI race continued to pick up in 2025. Taiwan, as the manufacturer of the world’s most cutting-edge chips, was one of the prime beneficiaries of this theme, and the 2025 GDP data confirmed this once more.
Taiwan’s fourth-quarter GDP for 2025 surged to 12.68% year-on-year, the highest YoY read for any quarter since the third quarter of 1987. 2025 GDP ended the year at 8.63% YoY, which was the highest level since 2010. Unlike in 2010, when Taiwan benefited from a very supportive base effect from weak -1.6% YoY growth in 2009 in the wake of the Global Financial Crisis, 2025 saw no such benefits, instead coming on the heels of a strong 2024.
Once again, GDP continues to surprise on the upside, despite a wave of very aggressive upward revisions, as Taiwan’s exports easily shrugged off the impact of a US reciprocal tariff hike. Recall that this time last year, markets were looking for growth of under 3%. It turns out that even after a wave upgrades to over 7%, forecasts continued to undershoot reality.
This strength was almost entirely concentrated on the external side. Net demand from the rest of the world contributed a whopping 11.91ppt of the 12.68ppt of growth in 4Q25, and 6.63ppt of the 8.63ppt of growth for the full year. Domestic demand, as a result, only contributed 0.77ppt in 4Q25 and 2.0ppt for the year as a whole – much less impressive.
This is consistent with what we’ve been seeing in the monthly data as well. Exports and industrial production have been seeing double-digit growth throughout the year, while retail sales and consumer confidence data have been considerably softer.