Economic growth remains buoyant in the third quarter of 2025

GDP reading: Taiwan's GDP expanded 7.6% in annual terms in Q3, following 8.0% growth in the prior quarter. The Q3 reading was well above market expectations and Taiwan’s own historical rates of growth. The economy continued to be buttressed by surging global demand for AI applications, which in turn aided sales of electronics exports. In contrast, domestic demand was muted, with government spending, private spending and fixed investment either flat or recording only minimal expansions. In seasonally adjusted quarter-on-quarter terms, the economy increased 1.3% in Q3, following 3.0% growth in the previous quarter.

Exports in the driving seat: Compared with the prior period's data, figures in Q3 softened for government consumption (+0.1% in annual terms vs +2.9% in Q2), exports of goods and services (+30.6% vs +35.0% in Q2) and imports of goods and services (+25.3% vs +31.3% in Q2). In contrast, the reading for private consumption improved in Q3 (+0.9% vs +0.5% in Q2). Investment was flat year on year in Q3, after 4.9% growth in Q2.

Panelist insight: Nomura analysts said: “Strikingly, net exports contributed 7.2pp to headline GDP growth (i.e. explains 94% of GDP growth), driven by tech-related shipments thanks to the AI boom, whereas domestic demand merely contributed 0.4pp. This highlights the intensifying divergence between the tech-driven export sector and the domestic economy, as existing US tariffs adversely affect traditional manufacturing industries and strong tech-led export growth has limited spillovers to domestic demand.”

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