TAIPEI, Dec 18 (Reuters) – Taiwan’s central bank on Thursday raised its economic growth forecast for the year due to booming exports while keeping its benchmark interest rate unchanged, as expected. Taiwan’s role as a major producer of advanced semiconductors powering the artificial intelligence boom for companies like Nvidia has fuelled its economy this year. The central bank left the benchmark discount rate unchanged at 2% at a quarterly meeting, in a unanimous decision that was in line with predictions from a Reuters poll in which all 30 economists forecast no change. It raised its 2025 estimate for economic growth to 7.31% from a previous forecast of 4.55% provided in September. For next year, it expects growth to slow to 3.67%, though that is better than a previous prediction of 2.68%. In a statement, the bank said it would closely monitor developments in U.S. tariffs as well as geopolitical risks. Taiwan’s economy grew 4.59% in 2024, buoyed by robust exports, including high demand for AI applications. Goods from Taiwan are subject to a 20% U.S. tariff, as part of President Donald Trump’s sweeping measures targeting imports from across the globe, though Taipei remains in talks with Washington to get a better deal. Semiconductors have thus far been excluded from the tariffs. The central bank trimmed its consumer price index forecast for this year to 1.66% from its September forecast of 1.75%. For next year, it said it expected inflation to slow further to 1.63%. Taiwan’s rate decision came after a sharply divided U.S. Federal Reserve cut interest rates last week, but signalled borrowing costs were unlikely to drop further in the near term.
(Reporting by Liang-sa Loh and Faith Hung; Writing by Ben Blanchard;)
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