Taiwan's central bank announced on Thursday that it has raised its forecast for gross domestic product (GDP) growth in Taiwan for 2021 to 5.75%, citing a strong export performance.
At the conclusion of a quarter policymaking meeting, the central bank decided to upgrade its GDP growth forecast for 2021 from an earlier estimate of 5.08 percent made in mid-June, while the bank expects Taiwan's economy to grow by 3.45 percent in 2022.
The central bank's forecast for 2021 is in line with government figures, after the Directorate General of Budget, Accounting and Statistics raised its forecast by 0.42 percentage points to 5.88 percent in August.
In addition to strong exports in both tech and old economy goods, the central bank said Taiwan also benefited from major domestic investment at a time when many manufacturers are keen to expand production to increase their market share.
The central bank said with an outbreak of domestically transmitted COVID-19 cases contained, consumer confidence has gradually recovered and private consumption is expected to grow.
The moderate GDP growth for 2022 largely reflects a relatively high comparison base in 2021, according to the central bank.
At the policymaking meeting, the central bank also decided to leave its key interest rates unchanged, the sixth consecutive quarter monetary policy has remained the same.
After the decision, the central bank's discount rate stays at 1.125 percent, the lowest in Taiwan's history.
Meanwhile, the rate on accommodations with collateral remains unchanged at 1.50 percent, while the rate on accommodations without collateral stays at 3.375 percent, according to the central bank.
Despite leaving interest rates untouched, the central bank said consumer prices are expected to remain stable, forecasting the local consumer price index (CPI) will grow 1.70 percent and core CPI, which includes fruit, vegetables and energy, is set to increase by 1.17 percent in 2021.
In 2022, CPI and core CPI are expected to grow 0.92 percent, the central bank said.
Meanwhile, the bank also raised select credit controls to rein in local property prices, effective from Friday.
At Thursday's meeting, the central bank determined that in select property markets, referring to Taipei, New Taipei, Taoyuan, Taichung, Kaohsiung and Hsinchu cities and Hsinchu County, individual buyers will be asked to pay the principal on mortgages for a second home evenly every month during the home loan period, in addition to interest payments.
In other cities and counties, home buyers will be still allowed to pay the principal based on their agreements with banks.
In addition, land buyers will be allowed to borrow up to 60 percent of the value of the land they acquire, down from 65 percent, while the mortgage ceiling will be lowered from 55 percent to 50 percent for idle land, the central bank said.
Prior to Thursday's decision, the central bank introduced tighter credit controls for the property market on Dec. 18, 2020 and March 19, 2021.
Source: Focus Taiwan News Channel