The Academia Sinica’s Institute of Economics became the first Taiwanese think tank to predict the country’s growth rate will exceed 10% when it significantly revised its 2026 economic growth forecast to 10.16% on Monday, July 13. Experts attribute Taiwan’s strong economic growth to its supply chain role amid the continued demand increase surrounding the global AI boom.

The institute had previously forecast Taiwan's 2026 economic growth at 3.71% at the end of last year. Its newest forecast is the highest among Taiwanese think tanks, including the Chung-Hua Institution for Economic Research and the Taiwan Institute of Economic Research, which both estimate rates of approximately 7.5% and 9.3%, respectively.

Institute of Economics Joint Research Fellow Lin Changqing (林常青) noted that the revision was based on economic data from the first half of the year and significant changes in Taiwan’s economic structure. Lin said that Taiwan’s economic growth rate in the first quarter far exceeded expectations at over 14.5%, mostly due to support from AI investments. 

He said, “The impact of the U.S.-China tariffs has largely disappeared. At the same time, demand for AI hardware is no longer driven by traditional economic conditions. It is increasingly tied to foundational investments like high-speed cloud computing and manufacturing, which make up the groundwork for building future productivity. So, we revised our projections up.”

However, Academia Sinica cautioned that there are still many uncertainties about the second half of the year. For example, whether the AI investment cycle will continue, or whether the profits from such investments outweigh the massive costs. Taiwan will also be affected by other global factors, such as the Iran war, U.S. technology controls, energy price fluctuations, and more, which could impact global financial markets and supply chains.