Taiwan likely to top South Korea, Japan in per capita GDP

Taiwan Semiconductor Manufacturing Company Reuters-Yonhap — Taiwan Semiconductor Manufacturing Company's factory/ Reuters-Yonhap

SEOUL, August 18 (AJP) - Taiwan's government raised its 2025 economic growth forecast on Monday, projecting the island will become the first of the original "Four Asian Tigers" to reach a per capita gross domestic product of $40,000.

Officials now expect the economy to expand by 4.45 percent next year, a significant jump from the previous estimate of 3.1 percent.

The Four Asian Tigers — a term for the high-growth economies of South Korea, Taiwan, Singapore, and Hong Kong — achieved rapid industrialization from the 1960s through the 1990s. Now, Taiwan is poised to surpass regional economic powerhouses like South Korea and Japan in per capita GDP.

Taiwan's government reported that the island's GDP surged by 8.01 percent in the second quarter compared to the same period a year ago. That growth rate far outpaced its regional peers: South Korea saw an increase of just 0.5 percent, Singapore's GDP grew by 4.4 percent, and Hong Kong's by 3.1 percent.

Officials credited the strong performance to record-breaking exports, which are projected to reach $589.2 billion this year, up 24.04 percent from 2024. This growth is being driven primarily by surging global demand for artificial intelligence-related technology.

Taiwan's dominance in the global semiconductor supply chain, led by the TSMC, has made it a key beneficiary of this AI boom.

Tsai Yu-tai, the head of the country's statistics directorate, said that despite uncertainties from U.S. tariff policies, the momentum in the AI sector remains strong, prompting companies to continue increasing capital expenditures.

By contrast, South Korea, which reached a per capita GDP of $30,000 in 2014, has struggled to move past that benchmark.

The country has faced weakened domestic consumption following a martial law crisis last year and export challenges from U.S. tariff pressures. The Korea Development Institute, a state-run think tank, maintained its 2025 growth forecast at a modest 0.8 percent in May, a downgrade from its 1.6 percent projection in February.

While the Four Asian Tigers once averaged annual economic growth of more than 7 percent, their paths have diverged in recent decades.

Although all four economies had a per capita GDP exceeding $30,000 by 2021, according to the International Monetary Fund's estimates, growth has slowed significantly since the 2000s due to factors like aging populations and shifting global supply chains.

Candice Kim candicekim1121@ajupress.com