Taiwan’s Economy Grows 14.36% in Q3, Outpacing the Official 11.42% Forecast
Taiwan’s economy grew 14.36% in the third quarter from a year earlier, the advance estimate published on 30 October showed, running well ahead of the official forecast for the quarter.
The result changes the arithmetic for the year. Growth over the first nine months reached 14.22%, against the 13.20% that the August outlook of the Directorate-General of Budget, Accounting and Statistics (DGBAS) implied for the same period, on The Edge’s calculation from its quarterly forecasts. The agency publishes its preliminary third-quarter estimate on 27 November and is due to update its outlook by 30 November.
On a seasonally adjusted basis, real GDP rose 3.21% from the second quarter. That is an annualised pace of 13.48%, against 5.70% in the second quarter.
Capital formation overtakes net exports as a source of growth
Real gross capital formation, which includes inventory changes, expanded 26.36% from a year earlier, the fastest of the seven quarters in the release’s table. The agency pointed to higher investment in machinery, transport equipment, intellectual property products and construction.
Capital formation alone added 6.32 percentage points to growth. In the second quarter it added 4.31 points, and in the first 2.13.
Government consumption rose 6.43%, also the fastest pace in the table, after 3.24% in the second quarter. It added 0.79 points to growth.
Real exports of goods and services grew 21.12%, which the agency tied to sustained demand for emerging technologies such as artificial intelligence and related applications. Imports grew 20.12%, close behind.
Private consumption grew 5.37%, a little slower than the second quarter’s 5.91%. The agency credited spending on information and communication, entertainment, transport and outbound travel, as well as securities and fund transaction fees lifted by buoyant financial markets.
Real growth by expenditure, year on year (in %)
| Component | Q1 | Q2 | Q3 |
|---|---|---|---|
| GDP | 15.43 | 12.93 | 14.36 |
| Private consumption | 4.83 | 5.91 | 5.37 |
| Government consumption | 4.29 | 3.24 | 6.43 |
| Capital formation | 7.94 | 16.20 | 26.36 |
| Exports | 35.41 | 21.24 | 21.12 |
| Imports | 25.41 | 18.25 | 20.12 |
Quarters of 2026 at chained 2021 prices; the third quarter is the advance estimate of 30 October 2026, the first two as published in August.
Domestic demand now supplies most of the growth
The make-up of growth has shifted through the year. Domestic demand contributed 9.41 percentage points of the third quarter’s growth, or 65.5% of the total.
In the first quarter the same share was 31.4%. Back then, net external demand did most of the work, adding 10.59 points; by the third quarter its contribution had narrowed to 4.94 points.
Exports remain the largest single contributor, at 15.95 points. Imports took away 11.01 points, after 10.44 points in the second quarter.
Contributions to year-on-year growth (in percentage points)
| Source | Q1 | Q2 | Q3 |
|---|---|---|---|
| GDP | 15.43 | 12.93 | 14.36 |
| Domestic demand | 4.84 | 7.30 | 9.41 |
| Private consumption | 2.20 | 2.58 | 2.30 |
| Government | 0.51 | 0.40 | 0.79 |
| Capital formation | 2.13 | 4.31 | 6.32 |
| Net external demand | 10.59 | 5.63 | 4.94 |
Quarters of 2026 as printed; domestic demand is made up of the three rows below it, and components may not add exactly because of rounding.
The quarter beats the August forecast by a wide margin
The August outlook had projected third-quarter growth of 11.42% from a year earlier. The advance estimate came in 2.94 percentage points higher.
The quarterly gain tells the same story. Seasonally adjusted output rose 3.21% on the quarter, where the outlook had pencilled in 0.56%.
Third quarter: August forecast and advance estimate (in %)
| Measure | Forecast | Advance |
|---|---|---|
| Year on year | 11.42 | 14.36 |
| Quarter on quarter, seasonally adjusted | 0.56 | 3.21 |
| Annualised | 2.28 | 13.48 |
Forecast from the August 2026 outlook; advance estimate of 30 October 2026.
The same outlook projected fourth-quarter growth of 5.37%. If the fourth quarter lands exactly on that forecast level, full-year growth would come to 11.79%. That figure is The Edge’s illustration, built from the agency’s chained-price quarterly levels and the advance third-quarter rate; the agency publishes no such number.
On the same illustration, the 11.05% full-year forecast would still be met if fourth-quarter growth slowed to 2.66%.
Estimates do move. In August the agency raised first-quarter growth to 15.43%, from 14.55% in its earlier estimate.
In current prices, the August outlook put 2026 GDP at NT$33.70 trillion, equivalent to $1.04 trillion. That is 17.36% more than in 2025, when nominal output was NT$28.72 trillion.
In The Edge’s reading, the swing toward investment and public spending makes this year’s growth less reliant on export volumes alone. The test is the fourth quarter, which the August outlook already expected to slow sharply, so the November outlook will show how much of that pace the agency now expects to carry into the year end.
The business monitor keeps flashing red
The National Development Council’s monitoring indicator continued to flash red in September, with the total score up 1 point to 41. August’s score was revised down to 40.
The council’s trend-adjusted leading index rose 0.56% to 104.69. It has now risen for 14 consecutive months. The coincident index edged up 0.01%, rising for a 12th month.
The central bank’s discount rate has stood at 2% since 22 March 2024, as set out after its September meeting.
What to watch:
27 November 2026: the preliminary estimate of third-quarter GDP.
By 30 November 2026: the agency’s updated economic forecast, covering the fourth quarter and 2027.
27 November 2026: the National Development Council’s business indicators for October.
Method: shares, gaps, sums and percentage changes not printed in the releases are The Edge’s calculations from the agency’s tables; the dollar equivalent uses the Central Bank of the Republic of China (Taiwan)’s interbank closing rate of NT$32.478 per dollar on 30 October 2026; prose figures are rounded, tables exact.
Primary source: Directorate-General of Budget, Accounting and Statistics, GDP: Advance Estimate of 2026Q3, 30 October 2026, and GDP: Preliminary Estimate for 2026Q2 and Outlook for 2026-27, 14 August 2026.
Sources: Directorate-General of Budget, Accounting and Statistics, National Development Council, Central Bank of the Republic of China (Taiwan), The Edge.
