Central bank raises Taiwan GDP growth forecast to 3.82%

Taipei, Sept. 19 (CNA) The Central Bank of the Republic of China (Taiwan) announced on Thursday that it has upgraded its forecast of Taiwan's gross domestic product (GDP) growth for 2024 to 3.82 percent, with the export-oriented economy expected to benefit from robust global demand for emerging technologies.

The upgrade was announced after the central bank wrapped up its quarterly policymaking meeting, raising 2024 GDP growth from the previous estimate of 3.77 percent made in June.

The revised forecast came closer to an estimate by the Directorate General of Budget, Accounting and Statistics (DGBAS) in August, which forecast Taiwan's GDP will grow 3.90 percent in 2024.

In addition to a strong export performance, the central bank said the local economy was also boosted by an increase in private investment and private consumption.

However, due to a relatively high comparison base over the same period of last year, the central bank said the local economy will grow 1.99 percent in the second half of this year after a 5.83 percent increase in the first half.

The central bank also raised its forecast for consumer price index (CPI) growth from 2.12 percent in June to 2.16 percent, while it lowered its forecast for growth in core CPI, which excludes fruit, vegetables and energy to 1.94 percent, below the 2 percent alert set by the bank.

Since June, bad weather has adversely impacted agricultural supplies and pushed up the price of fruit and vegetables so the central bank raised its CPI growth forecast, but core CPI growth will continue its downtrend, with fruit and vegetables excluded, the central bank said.

Looking ahead to 2025, the central bank said exports and private investment are expected to continue to grow and with momentum in private consumption on the rise, the local economy is expected to grow steadily at 3.08 percent.

In the policymaking meeting, the central bank also decided to leave its key interest rates unchanged for the second consecutive quarter despite a 50 basis point cut by the U.S. Federal Reserve overnight.

After the decision, the discount rate remains at 2 percent which is still the highest in 15 years, with the rate on accommodation with collateral at 2.375 percent, and the rate on accommodations without collateral at 4.250 percent.