Bank of America has revised its forecast for Taiwan's economic performance in 2026, increasing its GDP growth estimate to 8.0% from a prior forecast of 4.5%. The bank attributes the revision to a pronounced expansion driven by the technology sector.
According to the firm, Taiwan experienced a "blowout surge" in export-led growth during the fourth quarter of 2025, which the bank says demonstrates continued momentum in the economy. That export strength, combined with other developments, underpins the substantially higher growth projection.
Market indicators reflect this optimism. The iShares MSCI Taiwan ETF (EWT) has risen 40.87% over the last year and is trading near a 52-week high of $71.56, signaling strong investor appetite for Taiwan exposure tied to the technology cycle.
BofA pointed to several specific factors supporting its brighter outlook. The bank noted a more stable currency environment and the existence of a U.S.-Taiwan trade agreement, which it expects will help reduce marginal pressure on exports. Additionally, the bank cited aggressive capital expenditure plans among major technology firms as a contributor to capital formation within Taiwan's economy.
Beyond exports and corporate investment, BofA observed early signs that household consumption may be improving. The bank linked this to an emerging broadening of artificial intelligence-related economic momentum - indicating that gains associated with AI are beginning to extend beyond core technology producers into wider segments of the economy.
The combination of a strong export impulse, solid tech-sector capex and tentative consumer improvement informs BofA's more sanguine view of Taiwan's near-term growth prospects. The firm’s revision reflects its assessment that technology-led activity will remain a principal engine of expansion into 2026.
Context and implications
- Export-led growth in late 2025 appears to have been a key trigger for the revised forecast.
- Corporate capital investment in technology firms is cited as supporting domestic capital formation.
- Initial signs of improving consumption suggest potential diffusion of AI-driven momentum beyond the technology sector.