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DBS flags Taiwan’s AI cycle near peak as 2H26 outlook normalizes

DBS expects Taiwan growth to stay above trend through 3Q26 before normalizing from 4Q26, with inflation remaining sticky.

Reported · Written up by our desk · Central Banks

DBS Group Research, led by Ma Tieying, said Taiwan’s AI-driven expansion remains central to the island’s technology-oriented economy, but the AI supercycle is nearing a peak. In its 2H26 outlook, the bank expects Taiwan to hold above-trend growth through 3Q26 before normalizing from 4Q26. DBS also said inflation is likely to remain sticky, prompting revisions to its GDP and CPI forecasts.

DBS’s assessment frames the late-2026 slowdown as a consequence of the AI cycle maturing, rather than a shift away from Taiwan’s technology momentum.

FXStreet’s market wrap in the same package also noted broader risk signals, including a firmer US dollar tied to Middle East tensions, ahead of US CPI data and semiannual testimony by Chair Warsh.

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