Standard Chartered sharply raised its Taiwan GDP growth forecast for 2026 to 11.5% from 9.5%, a pace that would be the fastest since 2010 if realized, and lifted its 2027 projection to 6.5% from 5%. The revision followed Taiwan’s stronger-than-expected second-quarter performance and makes Standard Chartered the third foreign bank, after ING and UBS, to upgrade its outlook. Taiwan’s Directorate-General of Budget, Accounting and Statistics reported second-quarter GDP growth of 12.93% year over year, following 15.4% growth in the first quarter. The second-quarter expansion was increasingly driven by domestic demand, which contributed 7.3 percentage points, or 57% of total growth, compared with 5.6 percentage points from net exports. Fixed investment and private consumption contributed 3.1 and 2.6 percentage points, respectively. Standard Chartered’s Tony Phoo said AI is reshaping Taiwan’s growth model by extending beyond exports into corporate investment, consumption and broader domestic activity. July manufacturing and non-manufacturing PMI readings of 61.5 and 57.3 provided further evidence of momentum. The bank said Taiwan’s advanced chip-manufacturing position could limit the impact of potential new U.S. tariffs, while maintaining inflation forecasts of 2.1% for 2026 and 2% for 2027. Growth is expected to moderate from the fourth quarter because of high-base effects, but Standard Chartered expects the AI supercycle to continue through 2027 and beyond without signs of economic overheating so far.