RISKS TO GROWTH: While global prospects look rosy, inflation is rising at a faster pace and central banks around the world are preparing to end quantitative easing
Date: Mar 13, 2018
By: Ted Chen / Staff reporter
Cathay Financial Holding Co (國泰金控) yesterday raised its GDP growth forecast for the nation this year, but warned of external risks to growth.
The company revised up its growth forecast from 2 percent to 2.3 percent, as an improving economic growth momentum translates into stronger wage growth and consumption as well as higher interest rates ahead.
Despite the rosier outlook on global growth, inflation in the US, Europe and China is expected to rise faster at a time when central banks across the globe prepare to pull back quantitative easing efforts, researchers said, citing a survey by Bloomberg.
National Central University economics professor Hsu Chih-chiang (徐之強), who led the research team, said that Taiwan is also facing rising inflation, which adds to the conditions that would prompt the central bank to begin its interest rate hike cycle in the second half of this year. [FULL STORY]