Taiwan's economy grew 14.36% in the third quarter from a year earlier, its fastest third-quarter expansion in 48 years, as global spending on artificial intelligence kept export orders and factory investment running hot, according to an advance estimate from the Directorate General of Budget, Accounting and Statistics (DGBAS) released Oct. 30.

On a seasonally adjusted annualized basis, gross domestic product rose 13.48% from the second quarter, more than double the 5.70% pace of the April-June period, the statistics agency said. The quarter was the fourth in a row of double-digit year-on-year growth.

For investors across Asia, the figure confirms that Taiwan remains the region's most direct beneficiary of the AI build-out. The island's chipmakers and server assemblers sit at the front of the supply chain, and the data show that demand has not cooled even as markets have turned choppy. Taiwan's benchmark stock index fell 5.7% in October as foreign funds sold shares, a pullback that came after the strongest run of growth the economy has posted in decades.

Exports and Investment Lead Taiwan's Growth

Real exports of goods and services rose 21.12% in the quarter, which DGBAS attributed to continued demand for AI and related applications. Imports grew 20.12%. Net external demand contributed 4.94 percentage points of the 14.36% headline figure, according to the agency's tables.

Investment did more of the lifting than in earlier quarters. Gross capital formation, which combines business investment and changes in inventories, climbed 26.36%, up from 16.20% in the second quarter. That alone added 6.32 percentage points to growth, the largest contribution from any domestic demand component. DGBAS said spending rose on machinery, transport equipment, intellectual property and construction.

Chiang Hsin-yi, a specialist at DGBAS, said exports and business investment both came in stronger than the agency had expected, Focus Taiwan reported. Imports of capital equipment rose 58.5% in New Taiwan dollar terms, including a 35.66% increase in semiconductor equipment, according to the report. Chiang also said exports outside electronics and information and communications technology grew at double-digit rates, a sign that traditional industries are gradually recovering.

The advance estimate came in 2.94 percentage points above the agency's August projection for the quarter, and investment growth was 4.26 points above the previous forecast, Focus Taiwan reported.

Taiwan's Consumers Benefit From the Stock Rally

Households kept spending, though at a far gentler pace than exporters. Real private consumption rose 5.37%, the second straight quarter above 5%, compared with 5.91% in the second quarter. DGBAS cited spending on information and communication, entertainment, transport and outbound travel, plus higher brokerage and fund fees as financial markets boomed.

According to Focus Taiwan, Chiang pointed to a recovering car market and a wealth effect from Taiwan's stock market reaching record highs. Government consumption grew 6.43%.

Domestic demand as a whole expanded 11.91%, the fastest of the three quarters this year and well above the 5.73% recorded in the first quarter. That shift matters for investors because it suggests the boom is spreading beyond chip exporters into investment and household spending, which tend to be less exposed to swings in overseas orders.

What the Numbers Mean for 2026

Growth over the first three quarters of 2026 reached an estimated 14.22%, the highest for that period in half a century, according to Focus Taiwan. Chiang said the last time Taiwan sustained a comparable run of double-digit expansion was in 1986 and 1987, when growth topped 10% for six consecutive quarters during a period of capital and foreign exchange liberalization.

The nine-month result is already well ahead of the 11.05% full-year forecast DGBAS published on Aug. 14. That forecast, which Focus Taiwan described as a 39-year high, assumed exports of goods and services would grow 21.28% for the year and consumer prices would rise 2.07%, above the central bank's 2% alert threshold. Tsai Yu-tai, head of the DGBAS Department of Statistics, presented the August figures.

The comparison base becomes harder from here. Fourth-quarter growth in 2025 was 12.95% year on year and 28.71% on an annualized quarterly basis, according to the DGBAS tables, so year-on-year gains in the final quarter of 2026 face a much higher starting point than earlier in the year.

DGBAS will publish its preliminary third-quarter estimate on Nov. 27, the agency said.