Economy stays strong for a ninth straight month
By Crystal Hsu / Staff reporter
Taiwan’s economy maintained its strong momentum last month, with booming demand for artificial intelligence (AI) hardware continuing to drive exports and industrial activity, while improving consumer sentiment pointed to broader confidence in the expansion.
The National Development Council’s (NDC) business climate monitoring score stayed at 41 points last month, unchanged from July and remaining at a level signaling a booming economy for a ninth straight month, tying the historical record for the longest period from February to October set in 2021.
All nine components of the indicator maintained their signals, the council said yesterday.
The Republic of China flag, front right, is pictured alongside other national flags near Taipei Nangang Exhibition Center yesterday.
Photo: CNA
“Exports performed the strongest,” NDC Department of Economic Development Director Chen Mei-chu (陳美菊) told a news conference.
Wholesale, retail and food services reached record highs, while more companies said they expected business conditions to improve over the next six months, she said.
The leading index rose 0.51 percent last month, while the coincident index gained 0.36 percent, indicating that the expansion retained momentum, the council said.
Higher capital spending by US AI and cloud computing companies, mass production of new servers and chips, and spillover demand for some traditional industries should continue to support exports, Chen said.
Investment is expected to continue to be supported by expansion across Taiwan’s AI supply chain, particularly in advanced manufacturing and packaging, she said.
A stable labor market and strong corporate earnings could encourage companies to raise wages and dividends, while elevated stock prices might support consumer spending through a wealth effect, Chen said.
The strength of the economy was reflected in household sentiment, with the consumer confidence index rising 3.76 points to 68.77 this month, its highest level since April last year, a survey by the National Central University’s Research Center for Taiwan Economic Development (RCTED) showed yesterday.
All six components improved, with confidence in stock investments posting the biggest gain, climbing 7.7 points to 35.42, its highest level since November last year, the center said.
The gauge measuring sentiment toward home purchases jumped 8.81 points to 98.84, its biggest monthly gain since 2020, after the central bank eased lending restrictions on second-home buyers, it said.
Sentiment toward stock investment remained relatively subdued, despite the TAIEX reaching record highs earlier this month, RCTED executive director Dachrahn Wu (吳大任) said.
He cautioned that consumer surveys measure individual sentiment and might not track actual market movements.
Confidence in Taiwan’s economic outlook rose 5.82 points to 87.02, while sentiment toward household finances and employment improved.
National Central University economics professor Yau Ruey (姚睿) said that robust demand for AI hardware has supported Taiwan’s exports, prompting research institutions to raise their forecasts for GDP growth to between 10.3 percent and 11.6 percent this year.
Nevertheless, risks remain.
The NDC cited uncertainty over Middle East tensions, US tariff policy and monetary policy in major economies, while Yao warned that a rebound in oil prices to about US$100 a barrel could keep inflation elevated.
Strong demand from the cloud-computing boom could add upward pressure on prices, Yao said.
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