DBS Group Research economist Ma Tieying assesses Taiwan’s 2Q 2026 macro outlook, noting that the economy entered 2026 with strong growth and low inflation, supported by AI-related exports and easing US tariff pressures. However, the report highlights that rising energy prices from Middle East tensions and softening exports threaten this Goldilocks backdrop, with CPI revised to 1.9% and GDP growth kept at 7.0%.
Goldilocks conditions threatened by energy shock
“Taiwan’s “Goldilocks” economic environment is approaching a crossroads.”
“The economy entered 2026 from a position of strong growth and low inflation, supported by robust global demand for AI-related products and easing US tariff pressures.”
“However, this favorable mix is now coming under strain, as the US–Israel–Iran conflict disrupts global energy markets and broader supply chains.”
“Leading indicators already point to rising inflation and moderating exports in 2Q.”
“March PMI data show a sharp increase in input costs, reaching levels last seen during the Russia–Ukraine war in 2022, alongside a modest decline in export orders.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/taiwan-goldilocks-outlook-faces-energy-shock-dbs-202604091907
