At its December meeting, Taiwan's central bank opted to maintain the key interest rate, acknowledging that the current level supports overall robust economic and financial development. The decision was to keep the key discount rate unchanged at 2.0 percent. Additionally, the refinancing rate for secured loans remains at 2.375 percent, and the temporary accommodation rate is steady at 4.25 percent.
In recent months, Taiwan's exports have seen consistent growth, largely fueled by a high demand for artificial intelligence and other emerging technology applications. Moreover, domestic demand has risen, bolstered by increasing private consumption and a surge in capital equipment imports.
The central bank forecasts a 4.25 percent growth in Taiwan's economy for the current year, with an anticipated growth of 3.13 percent for 2025. Recent statistics indicate that Taiwan's Consumer Price Index (CPI) inflation increased to 2.08 percent in November, attributed to fluctuations in domestic food prices caused by weather disruptions. Core inflation has also risen to 1.74 percent.
The bank anticipates that both CPI and core CPI annual growth rates will decline to 1.89 percent and 1.79 percent, respectively, next year, as domestic services inflation is projected to decrease further.
Looking forward, the central bank emphasized that policymakers will remain vigilant toward changing domestic inflation trends, paying close attention to developments in U.S. economic and trade policies. Furthermore, they will monitor major global central bank decisions, potential economic downturns in China, geopolitical conflicts, extreme weather events, and their potential impacts on Taiwan's economic activity and financial conditions.
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