Taipei: SandP Global Ratings has affirmed Taiwan's "AA+" long-term and "A-1+" short-term issuer credit ratings, citing the country's strong external asset position, healthy fiscal conditions, and monetary flexibility.

According to Focus Taiwan, the ratings agency stated that Taiwan's outlook over the next 24 months remains stable. This is supported by expectations that semiconductor exports will help offset pressures from geopolitical risks, the energy crisis, and changing global trade conditions. "Our ratings on Taiwan are anchored on its robust external position and strong economic support," SandP commented, highlighting Taiwan's competitive export sector, which benefits from advancements in technology.

SandP indicated that the economic impact from the Middle East conflict is likely to be mitigated by Taiwan's government response to energy shocks and efforts by semiconductor firms, such as Taiwan Semiconductor Manufacturing Co. (TSMC), to secure essential manufacturing inputs. Taiwan's significant role in the artificial intelligence sector has contributed to its economic resilience over the past two years.

The agency noted that Taiwan's GDP growth reached a 15-year high of 8.7 percent in 2025, driven by strong exports, especially in semiconductors and consumer electronics. SandP forecasts a 6.3 percent growth in Taiwan's economy for 2026, which is lower than the 7.71 percent forecast by Taiwan's Directorate General of Budget, Accounting and Statistics (DGBAS).

Despite increased spending on defense and social benefits, Taiwan maintains a healthy fiscal position supported by strong revenue growth. SandP reported that Taiwan's net general government debt as a share of GDP has been declining since 2012, predicting the ratio will stand at 22.4 percent by the end of 2026 and remain stable over the next three years.

SandP also praised Taiwan's monetary flexibility, noting the central bank's effective monetary management and its success in keeping inflation low and stable, even amid ample financial system liquidity. Slow demand growth, continued fuel subsidies, and frozen electricity tariffs are expected to help maintain low inflation levels despite rising energy prices. SandP forecasts that Taiwan's inflation will slightly decrease to 1.6 percent this year, in comparison to the DGBAS forecast of 1.68 percent.