DBS Bank Ltd (星展銀行) expects Taiwan’s central bank to raise benchmark rates by 12.5 basis points every quarter through the remainder of this year and next year, lifting the benchmark discount rate by 87.5 basis points to 2.25 percent at the end of next year, DBS economist Ma Tieying (馬鐵英) said in a report.
“That would be within the estimated range of 2 to 3 percent Taylor rule-implied neutral rate,” Ma said in the report issued on March 25.
The Taylor rule, John Taylor’s econometric model that relates actual inflation, desired inflation, real GDP and target GDP, suggests that the US Federal
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Taiwan’s economy is likely to grow at a rate of 2.8 percent this year, which would be a solid follow-up to an estimated 5.5 percent increase last year, DBS Bank Ltd (星展銀行) said on Monday.
A slowing Chinese economy would likely weigh on exports from Taiwan, the Singapore-based bank added.
“We project that GDP will grow 2.8 percent this year, a slower rate than the 5.5 percent gain last year, but still in line with the long-term average trend,” bank economist Ma Tieying (馬鐵英) told a videoconference.
DBS stands by its October forecast, although major barometers have indicated that Taiwan could outperform, Ma
South Korea's central bank will raise interest rates on Thursday and carry a tightening cycle into next year as it tries to curb rising inflation and soaring home prices that have households piling on ever more debt, a Reuters poll found.