Taiwan's central bank is expected to hold its policy interest rate steady at 2% during its quarterly meeting this week, with economists forecasting no changes through mid-2027. The move follows strong economic performance fueled by booming demand for semiconductor exports.
The island's economy grew 8.68% in 2025-the fastest pace in 15 years-and is projected to expand 7.7% in 2026. Growth has been driven by the artificial intelligence boom, benefiting major players like TSMC.
Inflation remains contained, with February's consumer price index at 1.75%, below the central bank's 2% threshold for the tenth consecutive month. However, rising energy prices linked to Middle East tensions pose a potential risk of stagflation, analysts warn.
The central bank will release updated growth and inflation forecasts Thursday.