Taiwan central bank upgrades economic growth forecast, stands pat on rates

[TAIPEI] Taiwan's central bank revised up the island's growth outlook for the year on Thursday as strong exports bolstered a trade-reliant economy that has been resilient in the face of a spike of local Covid-19 cases, and kept interest rates steady as expected.

Taiwan's economy has continued to boom despite the uptick in infections on the island, buoyed by strong global demand for its tech products as many people work and study from home during the pandemic.

At its quarterly meeting, the central bank kept the benchmark discount rate at a record low of 1.125 per cent, as expected by all 14 economists in a Reuters poll.

This is the fifth time in a year-and-a-quarter it has decided to keep rates unchanged. It last cut rates at its March, 2020 quarterly meeting.

The central bank also raised its 2021 estimate for gross domestic product (GDP) growth to 5.08 per cent from 4.53 per cent forecast in March. Growth hit 3.11 per cent in 2020, after expanding 2.71 per cent in 2019.

GDP expanded by 8.92 per cent in the first quarter of 2021 from a year earlier, the strongest quarterly growth in over a decade.

REUTERS