The Taiwanese Economy in December 2025

The global economy maintains resilience, though 2026 growth momentum is expected to moderate or remain flat versus 2025. Key factors include AI industry development, U.S. tariff policies, and China's overcapacity, with varying impacts across economies. The U.S. shows robust growth from AI investment and policy support; the eurozone and UK face weakening momentum from tariffs, Chinese competition, and fiscal constraints; Japan's exports remain tariff-constrained despite key industry investments; China faces pressure from weak domestic demand and sluggish property markets, creating a differentiated global economic landscape.
In domestic manufacturing, strong demand from AI, high-performance computing, and cloud services drives robust product momentum. As Trump tariff uncertainties fade and tech giants remain optimistic about AI prospects, the December indicator continued rising. Services benefited from Christmas, New Year's Eve, year-end banquets, and concerts, plus operators' partnerships, promotions, and new products alongside overseas expansion, improving hospitality sector sentiment versus the prior survey.
In construction, year-end public works acceleration and ongoing semiconductor facility projects improved current sentiment. However, new soil disposal regulations create emerging challenges in disposal channels and execution, potentially affecting project progress and leading to neutral six-month outlook. In real estate, concentrated new housing deliveries and slight policy adjustments drove month-on-month December transaction growth, though year-on-year declines indicate low transaction levels. Mortgage policies, continued credit controls, developer inventory, and soil disposal policy progress will influence market performance, which remains in near-term adjustment.
According to survey results and model calculations, manufacturing, services, and construction composite indicators all rose in December 2025. Manufacturing rose for the sixth consecutive month; services for three consecutive months. For 2026 outlook, growth is expected to shift toward "warm both domestically and externally," with recovering private consumption and improved industry divergence. Given better-than-expected net external demand, investment, and private consumption, Taiwan's 2026 economic growth is forecast at 4.05%, up 1.45 percentage points from the November 2025 forecast.
In foreign trade, despite strong December performance, export growth contracted from 55.96% in November to 43.44% due to rising base effects, while imports contracted from 44.94% to 14.91%. In 2025, information and communication products and electronic components grew 89.55% and 25.76% respectively, contributing a combined 53.05% increase, while other categories rose only 0.91%. Import momentum persisted from deepening AI supply chain integration and export-derived demand, though December growth moderated on high base effects. Full-year 2025 exports grew 34.91% and imports 22.63%, with trade surplus reaching USD 157.14 billion, up 95.02%.
In production, continued AI, high-performance computing, and cloud data services demand drove steady information and electronics growth, though traditional industry production cuts offset some gains. December's manufacturing production index reached 133.94, up 11.44% month-on-month and 22.98% year-on-year. The AI wave drives emerging tech applications, while non-information electronics face overseas competition and weak end demand, with some manufacturers reducing production. Full-year 2025 industrial production grew 16.70%, manufacturing 17.87%.
In consumption, December retail sales reached NT$437.9 billion, up 0.87% year-on-year, though excluding automotive the rate was -1.09%. Automotive retail grew 10.19% from increased imports and year-end promotions. General merchandise rose 0.37% from Double 12, Christmas, and New Year opportunities plus fresh food and beverage promotions. Food and Beverage Services revenue reached NT$95.0 billion, down 1.06% as different Lunar New Year timing delayed corporate banquets and New Year dish orders, turning restaurant growth negative. Full-year 2025 food and Beverage Services revenue grew 2.86%.
In prices, December vegetable price declines lowered food category growth, though education and entertainment, clothing, and miscellaneous categories rose, driving overall increases. CPI year-on-year growth rose from 1.22% in November to 1.31%, while core CPI expanded from 1.71% to 1.83%. Full-year 2025 CPI grew 1.66%, PPI fell 1.84%.
In labor, full-year 2025 average unemployment was 3.35%, down 0.03 percentage points. End-December workers under reduced hours numbered 7,371, with metal and machinery most affected; this decreased 1,782 from end-November. January-November 2025 average real regular earnings grew 1.52% year-on-year, real total earnings 2.33%.
In finance, December's five major banks' weighted average new loan rate was 2.163%, up 0.044 percentage points from November's 2.119%. Strong AI supply chain November revenues, the Fed's expected December rate cut, and year-end positioning drove electronics and petrochemical gains. Heavy foreign buying of financial stocks pushed the Taiwan weighted index to 28,963.60 points at end-December, up 4.84% from end-November, with average daily volume at NT$484.056 billion. Early-month foreign net buying and inflows supported NT dollar appreciation; late-month selling and outflows created depreciation pressure. The NT dollar closed at NT$31.438 per USD at end-December, down 0.10% from end-November, showing range-bound volatility.

Business Survey Outcomes

The proportion of manufacturing firms that perceived their business as better than expected in December was 33.5%, a significant increase of 10.6 percentage points compared to 22.9% in the previous month. On the other hand, the proportion of those who perceived their business as worsening in the target month was 21.9%, a decrease of 7.3 percentage points compared to the 29.2% reported in the previous month. Additionally, the proportion of manufacturing firms that perceived their business as remaining constant in the target month was 44.6%, a slight decrease of 3.3 percentage points compared to the 47.9% recorded in the previous month.
Furthermore, in the target month, the segment of manufacturers who anticipated an improvement in their business over the next six months stood at 34.5%, representing an increase of 12.5 percentage points compared to the 22.0% recorded in November. Conversely, the proportion of firms foreseeing a deteriorating economic outlook was 18.4%, marking a drop of 6.8 percentage points from the 25.2% reported one month earlier. Meanwhile, 47.1% of manufacturing firms perceived their business outlook as remaining constant over the next six months, a decrease of 5.7 percentage points from 52.8% in the previous month.
The TIER Manufacturing Composite Indicator for December 2025, adjusted for seasonal factors, experienced a modest increase. The index reached 97.22 points, rising 3.61 points from 93.61 in the previous month, marking six consecutive months of upward momentum.
The TIER Service Sector Composite Indicator reached 92.44 in December 2025, up 1.21 points from the revised November figure of 91.23, marking three consecutive months of upward momentum.
The TIER Construction Sector Composite Indicator for December 2025 was 102.45 points, an increase of 2.31 points from November's 100.14 points, ending the previous month's decline and returning to an upward trajectory.

Analyses and Outlook of Industries

Following are manufacturers' sentiments that are industry-specific in the monthly TIER surveys:

Manufacturers’ sentiments that have been in decline in the December survey and are expected to deteriorate over the next six months include:
None.
　
Manufacturers’ sentiments that have been in decline in the December survey, but are expected to improve over the next six months include:
None.
　
Manufacturers’ sentiments that have been in decline in the December survey and are expected to remain sluggish over the next six months include:
Man-made Fibers Manufacturing, Cutlery and Tools Manufacturing, Audio and Video Electronic Products Manufacturing, Bicycles Manufacturing, Bicycles Parts Manufacturing, Insurance.
　
Manufacturers surveyed who felt the December outlook was the same as the previous month, but the outlook is expected to exacerbate over the next six months include:
Petroleum and Coal Products Manufacturing.
　
Manufacturers surveyed who felt the December outlook was the same as the previous month, but the outlook is expected to improve over the next six months include:
Frozen Food Manufacturing, Soft Drink Manufacturing, Apparel, Clothing Accessories and Other Textile Product Manufacturing, Leather, Fur and Allied Product Manufacturing, Paper Manufacturing, Metal Structure and Architectural Components Manufacturing, Electronic Machinery, Electronic Parts and Components Manufacturing, Motor Parts Manufacturing, Wholesale, Restaurants and Hotels
　
Manufacturers surveyed who felt the December outlook was the same as the previous month and the trend is expected to continue for the next six months include:
Manufacturing, Textiles Mills, Yarn Spinning Mills, Industrial Chemicals, Petrochemicals Manufacturing, Rubber Products Manufacturing, Plastic Products Manufacturing, Porcelain and Ceramic Products Manufacturing, Glass and Glass Products Manufacturing, Iron and Steel Basic Industries, Fabricated Metal Products Manufacturing, Metal Dies, Screw, Nut Manufacturing, Electric Wires and Cables Manufacturing, Electrical Appliances and Housewares Manufacturing, Real Estate Investment, Retail Sales, Securities, Telecommunication Services, Transportation and Storage.
　
Manufacturers’ sentiments that have improved in the December survey and is expected to deteriorate over the next six months include:
Non-metallic Mineral Products Manufacturing, Cement and Cement Products Manufacturing.
　
Manufacturers’ sentiments that have improved in the December survey and is expected to remain upbeat over the next six months include:
Food, Slaughtering, Edible Oil Manufacturing, Flour Milling and Grain Husking, Prepared Animal Feeds Manufacturing, Machinery and Equipment Manufacturing and Repairing, Industrial Machinery, Electrical Machinery, Electrical Machinery, Supplies Manufacturing and Repairing, Motorcycles Manufacturing, Precision Instruments Manufacturing, Education and Entertainment Articles Manufacturing, Banks.
　
Manufacturers’ sentiments that have improved in the December survey and the trend is expected to continue for the next six months include:
Fabric Mills, Wood and Bamboo Products Manufacturing, Printing, Plastics and Rubber Raw Materials, Chemical Products Manufacturing, Communications Equipment and Apparatus Manufacturing, Data Storage Media Units Manufacturing and Reproducing, Transport Equipment Manufacturing and Repairing, Motor Vehicles Manufacturing, Motorcycles Parts Manufacturing, Construction, Basic Civil Structure Construction.

Taiwan- Data and Forecast (26th January 2026)
NT$100 million, %