TAIPEI, March 19 (Reuters) - Taiwan's central bank on Thursday raised its growth outlook substantially for the year thanks to booming tech exports, but it also raised its inflation forecast, citing the impact of the war in the Middle East, and kept interest rates unchanged as expected. The central bank left the benchmark discount rate at 2%, in a unanimous decision and in line with predictions from a Reuters poll where all 29 economists forecast no change. The central bank raised its economic growth forecast to 7.28%
from the previous prediction of 3.67% given in December.
"Continued expansion in business opportunities related to emerging technology applications is expected to further support steady growth in Taiwan's exports," it said in a statement.
In view of the uncertainty surrounding the global economic and financial outlook, as well as the potential impact of the conflict in the Middle East and U.S. trade policy on domestic prices and the economy, the central bank considered it "appropriate" to stand pat on interest rates, it added. Taiwan's economy grew 8.68% in 2025, its fastest rate in 15 years, buoyed by high demand for semiconductors used in artificial intelligence applications from companies such as Nvidia. The central bank slightly raised its consumer price index (CPI) forecast for this year to 1.8%, up from its December forecast of 1.63%. Taiwan's rate decision came a day after the U.S. Federal Reserve held interest rates steady and projected higher inflation, steady unemployment and a single reduction in borrowing costs this year.
(Reporting by Liang-sa Loh and Faith Hung; Writing by Ben Blanchard; Editing by Jacqueline Wong and Thomas Derpinghaus)
