Tai­wan cbank says tough to get sig­nif­i­cant 2016 growth

The Pak Banker - - COMPANIES/BOSS -

Tai­wan's cen­tral bank said it will be dif­fi­cult for the trade-re­liant is­land to grow sig­nif­i­cantly this year due to "down­side" risks to global eco­nomic growth. "The down­side risks are ris­ing in the global econ­omy," the cen­tral bank said in a re­port Gov­er­nor Perng Fai-nan will present to par­lia­ment on Thurs­day. "This is not ben­e­fi­cial to Tai­wan's ex­ports. Sig­nif­i­cant growth in the (lo­cal) econ­omy will be dif­fi­cult, while the in­fla­tion out­look is mild," it said.

The re­port was seen by Reuters on Tues­day, one day af­ter the Tai­wan govern­ment re­ported that ex­ports in Fe­bru­ary con­tracted for the 13th con­sec­u­tive month.

Last month, the govern­ment slashed its 2016 eco­nomic growth out­look to 1.47 per­cent from 2.32 per­cent, while pro­ject­ing a year-onyear shrink­age for Jan­uary-March. Ex­ports are ex­pected to con­tract for the se­cond straight year.

The cen­tral bank re­port also sig­naled that the is­land's mon­e­tary au­thor­i­ties were not fazed by a Fe­bru­ary jump in in­fla­tion.

Data is­sued on Tues­day showed the con­sumer price in­dex rose 2.4 per­cent in Fe­bru­ary from a year ear­lier, triple the Jan­uary pace and the big­gest an­nual in­crease in three years.

On March 24, two weeks af­ter Perng's ap­pear­ance in par­lia­ment, the cen­tral bank will hold its quar­terly meet­ing.

At the past two meet­ings, the cen­tral bank cut the pol­icy dis­count rate, and mar­ket par­tic­i­pants ex­pect an­other re­duc­tion this time. Twice in the first quar­ter, the cen­tral bank has guided down mar­ket rates, seen as a sig­nal for a third in­ter­est rate cut.

In the re­port to par­lia­ment, the cen­tral bank said it will keep "ap­pro­pri­ate" mon­e­tary pol­icy to stim­u­late eco­nomic growth, but added that the ef­fect would be bet­ter when paired with fis­cal ex­pan­sion and struc­tural re­form.

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