China News Service, Taipei, October 16 (Reporter Lu Mei) Taiwan's China Economic Research Institute (China Economic Research Institute) announced on the 16th that due to the increase in global demand for artificial intelligence (AI), Taiwan's GDP growth rate is expected to reach 12.16% in 2026, a new high since 1988. Due to the extremely uneven development of the industry, it is difficult to reproduce the common prosperity of the 1980s when "money floods the feet" (a Hokkien proverb that means there is so much money that it can be spread on the ground above the ankles).
The Chinese Academy of Economics released its latest economic forecast in Taipei that day. The agency estimates that the GDP growth rate in the fourth quarter of this year will be 8.2%, and the GDP growth rate for the whole year will reach 12.16%, of which export trade will contribute 5.53 percentage points and domestic demand will contribute 6.63 percentage points. Analysis points out that the upgrade of AI software and hardware technology is conducive to the expansion of Taiwan's exports of information communications, electronics and semiconductor-related products. Taiwan's exports in 2026 will exceed the estimate of approximately 224.4 billion U.S. dollars, an annual increase of 44.93%.
A reporter at the press conference asked why the Taipei stock market was hitting 50,000 points and why the phenomenon of "money flooding the eyes" in Taiwanese society in the 1980s was not seen. Lian Xianming, president of the China Academy of Economics, said that an important feature of Taiwan's rapid economic development at that time was that wage growth was linked to stock market growth, and the people easily felt the benefits of the boom. While the Taipei stock market has increased by nearly 80% this year, people's real wages have not grown accordingly.
According to statistics from Taiwan's economic affairs department, among Taiwan's 24 categories of export products, electronic components and information and communication products in the semiconductor industry account for 80% of total exports. More than 70% of private investment in manufacturing comes from these two industries. The stock market value of TSMC alone accounts for more than 40% of the total market value of the Taipei stock market. However, the semiconductor and information communications industries only absorb about 8% of Taiwan’s employment population, and 90% of the employment population is still concentrated in traditional industries and service industries.
The China Academy of Economics predicts that Taiwan’s CPI (Consumer Price Index) annual growth rate this year will be 2.06%, exceeding the 2% inflation warning line. Yao Rui, a professor at the Department of Economics at Taiwan's National Central University, said that with oil and electricity prices receiving official subsidies, Taiwan's inflation level has exceeded the warning line for five consecutive months. If subsidies cannot be sustained, inflation data will be higher based on real market prices.
Peng Suling, director of the Economic Outlook Center of the Chinese Academy of Economics, pointed out that because the annual salary growth rate is lower than the CPI annual growth rate, the real wages of Taiwanese employees have shown negative growth since April this year, and the consumer confidence index has continued to decline.
