The central bank yesterday kept its policy rates in place, while raising its forecast for GDP growth this year from 4.53 percent to 5.08 percent, saying that this month’s COVID-19 outbreak has had little negative effect on exports and private investment, although uncertainty lingers.
Despite a vibrant economy, the central bank said it was not worried about inflation, nor was it inclined to further tighten credit, as the level-3 COVID-19 alert and coming property tax hikes have already helped cool the real-estate market.
Central bank Governor Yang Chin-long (楊金龍) said he agreed with the US Federal Reserve that current inflationary pressures are temporary and would start to subdue next quarter when the low base effect tapers off.
Photo: CNA
Excluding spikes in oil prices and airfares, consumer prices remain stable, giving the central bank room to hold policy rates unchanged, Yang told an online news conference.
It is the first time that the central bank has moved the quarterly media briefing online after its board members met in three separate rooms to avoid infection risks.
The central bank is looking at an annual increase of 1.58 percent in consumer prices this year with the core consumer price index, a more reliable long-term price tracker because it expels volatile items, clocking a 1.1 percent gain.
Although consumer activity has come to an abrupt halt, exports and private investment continue to pick up as the US and Europe reopen their economies, favorable for global trade, Yang said.
Exports this quarter are likely to rise by more than 30 percent from a year earlier, riding on strong inventory demand worldwide for tech and non-tech products, Ministry of Finance data showed.
The governor reiterated that he was uncomfortable about increasing interest rates soon, as even talking about it could attract hot money, while peers around the world maintain quantitative easing to support their economies.
The New Taiwan dollar has climbed to a near three-decade high against the US dollar this year on the back of robust exports and relatively generous dividend payouts by local listed firms, Yang said.
Yang said he understood that tight movement restrictions were responsible for sluggish property transactions, and the market could regain traction once the level 3 alert is lifted.
“The central bank will keep a close watch, and take quick action to rein in property price hikes whenever necessary,” he said, as the effect of selective credit controls is not yet evident.
However, the governor said he has been pleased with ultra-low instances of bad loans linked to mortgage and construction financing.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat