Taiwan’s Directorate General of Budget, Accounting and Statistics (DGBAS) will release its latest economic growth forecast on Friday, August 14, predicting full-year GDP growth to exceed 10% due to strong AI-related demand, exports and investment. However, inflation is being driven by rising international oil prices and increasing costs for computers and memory chips related to AI demand, with oil prices having the broadest impact on future price trends.

The Chung-Hua Institution for Economic Research (CIER) has updated its consumer price index growth forecast to 2.02 percent, surpassing the 2 percent inflation threshold.

Tsai Yu-tai (蔡鈺泰), head of DGBAS's Department of Statistics, said oil prices remain the most critical factor in future inflation trends. Tsai said: “Actually, oil prices are still the key; oil prices are the key. Of course, the government will try to stabilize and absorb the impact as much as possible. Like recently, there's been volatility, but CPC Corporation hasn't actually made any adjustments. Since it hasn't adjusted prices, there's still a certain year-on-year increase, so this factor will have an effect. If this issue can be resolved quickly in the short term, the pressure will ease, and the impact will be smaller."

The rising demand for artificial intelligence (AI) is impacting consumer electronics prices. According to Tsai, increased demand for AI products is driving up prices for memory chips, computers, and peripherals, with computers rising over 5% and some peripherals over 15%. While these categories account for about 1.6% of the Consumer Price Index (CPI), their overall impact is limited because price increases for certain semiconductors mainly affect export prices rather than domestic ones. The CPI is primarily influenced by components used in mature-process chips.