Taiwan central bank says may revise up 2021 growth forecast

FILE PHOTO: A staff member stands beside the Taiwanese Central Bank logo in Taipei, Taiwan February 26, 2018. REUTERS/Tyrone Siu/File Photo

TAIPEI (Reuters) – Taiwan’s central bank may again revise this year’s growth forecast higher given the island’s strong economic prospects, but will also keep an eye on whether the economy could overheat, its governor Yang Chin-long said on Monday.

The central bank last month raised its 2021 estimate for gross domestic product (GDP) growth to 4.53% from 3.68% forecast in December, as Taiwan gained from worldwide demand for its tech products due to the work-from-home trend during the COVID-19 pandemic.

Yang, taking lawmaker questions in parliament, said domestic investment and consumption would play a more important role in lifting domestic growth this year.

He added that like other parts of the world, Taiwan had concerns about the economy overheating.

Taiwan has kept its benchmark discount rate at a record low of 1.125% to keep borrowing costs down for businesses and households hit by the impact of the pandemic.

Yang said that inflation was an important factor to consider on whether to raise interest rates going forward.

Taiwan’s consumer price index rose to 1.26% in March from a year earlier.

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