Taiwan Interest Rate

The Central Bank of the Republic of Taiwan held its key discount rate steady at 2% during its December 2024 meeting, aligning with market expectations. The board believed that maintaining the current rate would support the steady development of the overall economy and ensure financial stability. The central bank raised its 2024 GDP growth forecast to 4.25% from 3.82% in September. For 2025, the bank now expects growth of 3.13%, slightly higher than the previous prediction of 3.08%. However, it cautioned that potential risks could emerge next year due to uncertainties surrounding trade policies from the incoming Trump administration in the US. Additionally, the bank also adjusted its inflation forecast for this year to 2.18% from a previous estimate of 2.16%, projecting it would drop to 1.89% next year.

The Central Bank of the Republic of Taiwan kept its key discount rate unchanged at 2% during its September 2024 meeting, in line with market expectations. Policymakers stated that maintaining the current rate would support the steady development of both the overall economy and financial stability. From January to August 2024, consumer prices increased by an average of 2.32%, while core CPI grew at an annual rate of 1.97%. The Bank projected that inflation would ease slightly in the second half of the year, forecasting annual CPI growth at 2.16% and core CPI at 1.94%, both lower than the previous forecasts of 2.49% and 2.58%, respectively. Meanwhile, the Bank expected the economic growth rate to be 1.99% in the second half of the year and 3.82% for the full year, driven by robust export growth, a significant increase in capital equipment imports, and strong momentum in private investment and consumption, though slightly tempered by a higher comparison base from the previous period.

The Central Bank of Taiwan held its key discount rate at 2% during its June 2024 meeting, after an unexpected hike during its last policy meeting, aligning with market expectations. Policymakers noted that the current stance is appropriate to help the overall economic and financial development to be stable. From January to May this year, consumer prices grew at an average annual rate of 2.24%, while the core CPI grew at an annual rate of 2.06%, showing a gradual decline. The Bank expects inflation to slowly decrease in the second half of the year, with annual CPI and core CPI growth forecasted at 2.12% and 2.00%, respectively, lower than last year's 2.49% and 2.58%. Meanwhile, the economy is also expected to grow steadily in the second quarter, but the second-half economic growth will be slower, with a full-year forecast of 3.77%, up from March's projection of 3.22%.