Standard Chartered raised its Taiwan 2026 GDP growth forecast to 8.0%, up from 3.8%. This follows Q4-2025 GDP growth of 12.7% year on year and full-year 2025 growth of 8.7%. Q4-2025 quarter-on-quarter growth was 5.4%, and the bank expects some “statistical payback” in Q1-2026.
The outlook is tied to global semiconductor demand and stronger exports of ICT goods and electronic components. Exports rose 70% year on year in January, helped by shipments ahead of the Lunar New Year holidays in February, after 49.4% growth in Q4-2025.
Semiconductor Led Outlook
A recent US trade deal is expected to make it easier for exporters. The US makes up 30% of Taiwan’s exports.
The bank expects bumpy growth and a wider gap in household incomes. It also expects the central bank (CBC) to keep targeted credit controls to limit property-related borrowing.
With the 2026 GDP growth forecast now at 8.0%, our main view is bullish on Taiwanese equities. The TAIEX index has already moved above 25,000 this past week, supported by tech export data from late 2025. Buying call options on the index or on major technology ETFs is a direct way to gain exposure to this strength.
The 70% year-on-year jump in January exports also supports the New Taiwan Dollar. The currency has strengthened to a 15-month high, trading below 29.5 per US dollar. Derivative traders may consider long positions in TWD futures, as ongoing demand for Taiwanese goods could push the currency higher.
Positioning For Currency Strength
This growth is heavily driven by the AI and semiconductor upcycle, as shown by ICT shipment data. A more focused approach is to look at options on major firms such as TSMC, whose shares are up more than 20% since the start of the year. Bull call spreads can target further gains in this sector while helping control premium costs.
However, the warning of “statistical payback” matters after the very strong growth seen in late 2025. Fast, steep runs often bring higher volatility and can lead to a sharp, short-lived correction. Hedging long positions with short-dated put options can help protect against a sudden pullback in the coming weeks.
The central bank’s use of selective credit controls, instead of near-term interest rate hikes, suggests it wants to cool the property market without hurting exports. This may mean financial and real estate stocks lag the broader market. For that reason, we should stay underweight in derivative positions linked to these domestic-focused sectors.
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