Taiwan's economy is projected to experience a GDP growth of 2.90% in 2025, according to the Taiwan Research Institute (TRI), reflecting concerns over a global economic slowdown.

In contrast, the Directorate General of Budget, Accounting and Statistics (DGBAS) has forecasted a slightly higher GDP growth of 3.10% as of late May 2025.

TRI President Wu Tsai-yi has expressed caution regarding the local economy, particularly as the latter half of 2025 may present significant economic challenges due to the conclusion of tariff negotiations and the fading impact of emergency inventory boosts.

The TRI anticipates that the negative effects of the Trump administration's 'reciprocal' tariffs, which include a 32% import duty on Taiwanese goods, will become more pronounced in the latter part of 2025.

Liu Tai-ying, the founder of the TRI, emphasized that the unpredictable nature of U.S. political dynamics, particularly under President Trump, adds to global economic uncertainty, impacting Taiwan's exporters.

The institute has identified vulnerabilities such as U.S.-China trade tensions and currency instability in Asia as risks to Taiwan's export-dependent economy.

Despite these challenges, private sector investment is projected to grow by 4.54% as businesses expand production to meet global demand.

Taiwan's exports are expected to rise by 9.82% in 2025, driven by advancements in emerging technologies like artificial intelligence and high-performance computing.

However, private consumption is projected to increase modestly by only 1.50%, reflecting weakened domestic spending due to global uncertainties.

Inflation is expected to ease, with a projected consumer price index increase of 1.98%, remaining below the central bank's 2% intervention threshold.

The TRI forecasts an average exchange rate of NT$30.69 against the U.S. dollar in 2025, indicating a stronger currency compared to NT$32.11 in 2024.

Both the TRI and DGBAS expect stronger economic growth in the first half of the year, with TRI estimating 5.35% growth, but a significant slowdown to around 1.00% in the second half.