Preliminary estimates showed AI-driven exports remained strong, while investment and consumption were revised sharply higher and domestic demand overtook net external demand as the main growth driver.
Taiwan’s economy expanded 12.92% year on year in the second quarter of 2026, beating the May forecast of 10.83% but slowing from the first quarter’s 14.55%. The result marked a third straight quarter of double-digit growth, while first-half growth reached 13.72%, the strongest performance for the same period in nearly 50 years. The Directorate-General of Budget, Accounting and Statistics said demand linked to AI, high-performance computing and cloud services kept shipments of electronic and information communications products strong. Real exports of goods and services rose 21.64%, above the earlier forecast of 20.95%, while merchandise exports in U.S. dollar terms climbed 43.73%. Imports also surged as manufacturers stocked materials and bought capital equipment to meet export and investment demand. Real imports of goods and services increased 18.27%, topping the prior forecast of 16.15%, while merchandise imports in U.S. dollar terms rose 45.08%. Net external demand contributed 5.93 percentage points to growth, down from the May forecast of 6.65 percentage points but still a major support. Domestic demand strengthened more sharply, contributing 7.00 percentage points to growth and surpassing net external demand. Real capital formation grew 15.14%, revised up by 7.23 percentage points from the May forecast, with capital equipment imports in New Taiwan dollar terms rising 52.65% and semiconductor equipment imports up 40.38%. Private consumption grew 5.88%, helped by stock market wealth effects, stronger vehicle buying sentiment and increased spending on financial services, travel, leisure and communications. Government consumption rose 3.22%.