Financial Holding Economists Warn of Downside Risk to 2026 Growth

Although AI and technology-sector capital spending are supporting the global economy in 2026, Fubon Financial Holding Chief Economist Lo Wei and Cathay United Bank Chief Economist Lin Chi-chao pointed to three major risks: war in the Middle East, policies at major central banks, and U.S. trade and foreign policy. Higher oil prices would drive up raw-material and transportation costs, squeezing household income and corporate profits and making higher inflation forecasts and lower growth projections central concerns for markets.

At Fubon Financial Holding’s international outlook briefing on April 30, Lo warned that Taiwan’s 2026 economic growth could fall below 7% if the Strait of Hormuz remains blocked through the end of May. If international oil prices stay above $120 a barrel for more than a month, the U.S. economy would slow markedly in the second half and Taiwan’s growth could fall below 6%. Lin separately estimated that U.S. corporate earnings still have room to grow by about 20% in 2026, but cautioned investors against chasing short-term gains.