Taiwan Tech Boom and Rate Risks

Societe Generale has upgraded Taiwan's 2026 GDP forecast to 6.3% driven by an AI-led tech boom. While the central bank is expected to remain on hold in 2026, rising medium-term inflation risks from the tech sector likely herald a tightening cycle in 2027.

Key Takeaways

• 1.Taiwan's 2026 GDP forecast has been significantly upgraded to 6.3% (from 3.0%) due to robust demand in the AI supply chain and tech exports.
• 2.Near-term rate hike risks for 2026 are limited as inflation remains benign and non-tech sectors continue to struggle.
• 3.Medium-term rate risks are rising; a shallow tightening cycle is expected to begin in 2027 with two 12.5bp hikes as the economy becomes more tech-centric.

Table of Contents

• On Our Minds - Taiwan
• Tech Boom Raises Medium-Term Rate Risks
• Upgrading Taiwan's 2026 GDP forecast on stronger tech outlook
• Benign inflation outlook in 2026, with some upside risks down the road
• Upside risks to the rate path beyond 2026
• APPENDIX

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