TAIPEI (TVBS News) — Taiwan's central bank announced on Thursday (Dec. 14) that it would maintain its current interest rate for the third consecutive time during its quarterly board meeting.
Central Bank Governor Yang Chin-long stated that the decision was driven by price stability and the need to balance consumer prices with economic growth.
Despite significant inflation due to natural disasters, such as consecutive typhoons in Q3 and Q4, the central bank anticipates inflation to drop below 2% next year. Yearly Consumer Price Index (CPI) and core CPI forecasts have been raised to reflect ongoing high prices.
This year, Taiwan's GDP growth rate was adjusted slightly from 1.46% to 1.4%, primarily due to inflation. However, 2023 forecasts are more optimistic, projecting a GDP growth rate of 3.12%.
This outlook is supported by increased private consumption, particularly in tourism and dining, and the central bank's expectation of global export growth, which is set to stimulate local investment and drive economic recovery next year.
In contrast to the U.S. Federal Reserve's approach of signaling rate cuts, Taiwan's Central Bank intends to adjust its monetary policy gradually based on domestic economic conditions.
Despite soaring housing prices, the central bank has chosen not to implement stricter measures or withdraw from market intervention, in order to avoid further impact on the property market.