CONCERNS: Persistent negative output gaps show the economy still needs support, Yang Chin-long said, but the bank said it was not worried about a contraction in GDP
Date: Mar 22, 2019
By: Crystal Hsu / Staff reporter
The central bank yesterday kept its rediscount rate unchanged at 1.375 percent for the
11th consecutive quarter, on concerns about an economic slowdown at home and abroad as the US-China trade dispute lingers.
“Growing uncertainty and persistent negative output gaps warrant an extended accommodative monetary policy to help support economic growth,” central bank Governor Yang Chin-long (楊金龍) told a news conference in Taipei after the bank’s quarterly board meeting.
The central bank trimmed its GDP growth forecast for this year from 2.33 percent to 2.13 percent, as the global economy might fare weaker than expected, which would in turn slow demand for Taiwanese exports.
As inflation is also easing, because international crude oil and raw material prices have lost steam due to weakening demand, the bank also slashed its growth estimate for the consumer price index (CPI) and core CPI to 0.91 percent and 0.78 percent respectively this year, lower than the increases of 1.05 percent and 0.93 percent it predicted in December last year. [FULL STORY]