Anticipated Surplus Predicted at NT$4.79tn According to DGBAS Report
Taiwan's Excess Savings Reach Record High Amid Global AI Demand
Taiwan's excess savings are projected to reach a record high of NT$4.79 trillion (US$159 billion) this year, up from NT$3.95 trillion last year, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS). This surge in excess savings is driven by Taiwan's current account surplus, fueled by strong global demand for artificial intelligence (AI) applications and emerging technologies.
The current account surplus, which primarily measures exports and imports of a nation's merchandise and services, reached a historical high in Q2 2025, with a surplus of US$36.23 billion. This surplus was primarily from a goods trade surplus of US$36.18 billion, driven by exports of advanced tech products linked to AI applications.
Taiwan's export-oriented economy benefits from this demand, creating wealth accumulation and strengthening foreign reserves. According to Fitch Ratings, the surplus amounts to around 15% of GDP. Such a surplus and growing foreign reserves provide a buffer for economic shocks and enhance Taiwan's fiscal and monetary policy flexibility.
However, the excess savings represent funds that are not immediately reinvested into domestic capital formation or consumption, potentially limiting short-term economic expansion due to underutilization of resources. The challenge lies in converting these excess savings into productive investments domestically to sustain long-term economic growth. Without sufficient domestic investment, the surplus could indicate an imbalance where growth potential is restrained despite high savings.
National Central University Research Center for Taiwan Economic Development director Dachrahn Wu expressed caution due to potential signs of slowing in the US job market and the possibility of accelerated inflation in the second half of this year. He also expressed concern about global demand for AI applications and their potential impact on Taiwan's exports and economic growth.
The local manufacturing sector could scale back its investments in Taiwan due to US tariff policies, which could compromise the nation's investment growth. The DGBAS, however, appears upbeat that global demand for AI products would continue to push up exports and investments.
Looking ahead, outbound sales are set to grow an additional 2.01% next year, increasing the trade surplus to US$150.9 billion. The DGBAS predicts Taiwan's excess savings to grow to about NT$5.1 trillion next year, reflecting continued strong global demand for AI applications and Taiwan's export-oriented economy.
In summary, Taiwan's current account surplus driven by global AI demand leads to record high excess savings, signaling strong external sector performance but also reflecting idle funds that could limit domestic investment-driven growth unless effectively channeled into productive use. The potential risks of slowing global demand, US tariffs, and inflation must be carefully managed to ensure sustainable long-term economic growth for Taiwan.
[1] Directorate-General of Budget, Accounting and Statistics (DGBAS) [2] Central News Agency (CNA) [3] Fitch Ratings [5] Reuters
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