In its latest World Economic Outlook, the International Monetary Fund (IMF) significantly revised upward Taiwan’s economic growth rate for this year to 10.7%—the highest among major global economies—and raised the forecast for next year to 4.3%.
Compared to the April projections of 5.2% and 3%, the IMF raised its growth forecasts for Taiwan by 5.5 and 1.3 percentage points for this year and next, respectively. Inflation rates for the two years are projected at 2% and 1.8%, slightly higher than the April estimates of 1.5% and 1.6%.
The IMF projects global economic growth of 3.1% this year, matching its April forecast and slightly exceeding the update issued in July. Assuming a gradual normalization of energy supplies, the U.S. economy is expected to grow by 2.3% in both this year and next, driven by consumption, fiscal policy, and technology investment; forecasts for the Eurozone and the UK remain largely stable.
Global inflation is estimated to reach 4.7% this year, up from 4.1% last year.
While the global economy has demonstrated resilience in the face of the most severe energy shock in decades, growth could slow sharply if inflation spirals out of control and borrowing costs continue to rise; furthermore, the boost from AI investment has not benefited all nations equally.
If the conflict involving the U.S. and Iran were to escalate—driving up commodity prices and borrowing costs—and confidence in the fiscal and monetary policies of major economies were to erode, global growth rates for this year and next would fall 0.2 and 0.5 percentage points below the baseline forecasts, respectively. Roughly two-thirds of this impact would stem from persistent disruptions in oil and gas markets and surging energy bills, which erode household purchasing power and business investment.
Under this scenario, global inflation next year would also be 1.1 percentage points higher than the baseline forecast.
IMF Chief Economist Silvana Tenreyro stated that nations should rein in debt and rebuild fiscal space, while central banks must maintain interest rates high enough to curb inflation and tighten policy further if necessary.