Taiwan’s interest rates unlikely to change next year: Standard Chartered

Taiwan GDP forecast to grow by 2.5% in 2019

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Busy street in Taipei. (Image courtesy of Pxhere)

Busy street in Taipei. (Image courtesy of Pxhere)

TAIPEI (Taiwan News) – Taiwan’s interest rates are unlikely to change in 2019 due to uncertainty in the global economy, volatility in emerging markets, and risks associated with the U.S.-China trade war, according to British financial giant Standard Chartered.

The bank also projects Taiwan’s gross domestic product (GDP) to grow by 2.5 percent in 2019, reported CNA.

Standard Chartered's analysis was outlined during a press event in Taipei on Dec. 10, when the bank presented their global economic outlook.

David Mann, Global Chief Economist at Standard Chartered, said the global economy faces four major risks; U.S.-China trade war, European geopolitical risks, oil price volatility, and issues associated with China’s fiscal and monetary positioning. In this regard, the bank forecasts global economic growth to continue at a slow rate next year.

Tony Phoo (符銘財), senior economist at Standard Chartered, said he expects capital investment in Taiwan to rebound next year, as Taiwan is likely to attract investors as part of the disruption and rerouting of global capital in response to the trade war.

Phoo went on to suggest public commitments by the Taiwan government to support companies thinking about investing in Taiwan in regards to supply of land and electricity, as well as other measures, might increase the pace of Taiwanese companies returning to Taiwan.

Lastly, Phoo said the minutes from the most recent Taiwan central bank meeting show a cautious tone due to global uncertainty, as well as awareness of the likelihood of a slowdown of domestic economic growth this year. In this regard, Standard Chartered expects interest rates to remain unchained, and for growth to be around 2.5 percent in 2019.

Standard Charter’s growth forecast is slightly more optimistic than Taiwan’s Directorate General of Budget, Accounting and Statistics, which predicts GDP will increase by 2.41 percent next year.