Imported inflation still controllable, Central Bank Director: Taiwan currently has no room for interest rate hikes or cuts
Amid Middle East tensions, Taiwan's Central Bank director Chang Chien-yi stated that with CPI growth under 2% and economic growth revised to 7.56%, there is currently no room for interest rate changes.
📋 Article Processing Timeline
- 📰 Published: April 24, 2026 at 21:24
- 🔍 Collected: April 24, 2026 at 21:32 (7 min after Published)
- 🤖 AI Analyzed: April 24, 2026 at 21:56 (23 min after Collected)
(Central News Agency reporter Pan Zi-yu, Taipei, 24th) The escalating war in the Middle East has raised concerns about imported inflation, drawing outside attention to whether the Central Bank will take preventive interest rate hikes. Central Bank Director and President of the Taiwan Institute of Economic Research (TIER), Chang Chien-yi, stated today that Taiwan's current annual Consumer Price Index (CPI) growth rate is below 2%, and the economic growth rate has exceeded 7%, so there is "no room for interest rate hikes or cuts."
TIER released its economic forecast today, showing that despite disruptions from the Middle East war, Taiwan is benefiting from strong AI demand, which drives the twin engines of exports and investment. TIER substantially revised its economic growth forecast for this year up to 7.56%. Regarding prices, the Middle East war has caused a surge in international raw material prices, but due to the government's price stabilization measures, imported inflation pressure remains controllable. The CPI growth rate for 2026 is forecast at 1.89%, below the 2% inflation warning line.
Chang Chien-yi mentioned that Central Bank Governor Yang Chin-long recently noted that if prices continue to rise, the Central Bank will step in to execute a tight monetary policy. However, observing the latest economic data after the outbreak of the Middle East war, the CPI increase in March did not climb significantly, and major institutions' forecasts for this year's CPI inflation rate are mostly between 1.8% and 1.9%, with economic growth above 7%. In reality, there is no room for either rate hikes or cuts.
Sun Ming-te, Director of TIER's Economic Forecasting Center, added that inflation is divided into supply-side push and demand-side pull. The current inflation belongs to the former, triggered by rising costs. Supply-side inflation should not be addressed by the Central Bank raising interest rates, but rather through methods like reducing commodity taxes and providing subsidies to suppress prices at the source, which weakens the transmission effect to the downstream.
Sun Ming-te bluntly stated that TIER only slightly revised its full-year CPI forecast upward this time precisely because the government's supply-side rescue policies were effective. In fact, not only Taiwan, but Japan and South Korea also have similar policies, stabilizing prices through subsidies to avoid harming economic fundamentals.
Chang Chien-yi said that unless the Middle East war turns into a prolonged event lasting more than 150 days, affecting transportation in the Strait of Hormuz, and oil prices rise to a point where CPC Corporation can no longer sustain it and the government cannot provide subsidies or capital increases, the pressure will rise. When CPC Corporation is forced to raise prices and it is reflected in the CPI increase, the Central Bank will step in to implement a tight monetary policy.
TIER released its economic forecast today, showing that despite disruptions from the Middle East war, Taiwan is benefiting from strong AI demand, which drives the twin engines of exports and investment. TIER substantially revised its economic growth forecast for this year up to 7.56%. Regarding prices, the Middle East war has caused a surge in international raw material prices, but due to the government's price stabilization measures, imported inflation pressure remains controllable. The CPI growth rate for 2026 is forecast at 1.89%, below the 2% inflation warning line.
Chang Chien-yi mentioned that Central Bank Governor Yang Chin-long recently noted that if prices continue to rise, the Central Bank will step in to execute a tight monetary policy. However, observing the latest economic data after the outbreak of the Middle East war, the CPI increase in March did not climb significantly, and major institutions' forecasts for this year's CPI inflation rate are mostly between 1.8% and 1.9%, with economic growth above 7%. In reality, there is no room for either rate hikes or cuts.
Sun Ming-te, Director of TIER's Economic Forecasting Center, added that inflation is divided into supply-side push and demand-side pull. The current inflation belongs to the former, triggered by rising costs. Supply-side inflation should not be addressed by the Central Bank raising interest rates, but rather through methods like reducing commodity taxes and providing subsidies to suppress prices at the source, which weakens the transmission effect to the downstream.
Sun Ming-te bluntly stated that TIER only slightly revised its full-year CPI forecast upward this time precisely because the government's supply-side rescue policies were effective. In fact, not only Taiwan, but Japan and South Korea also have similar policies, stabilizing prices through subsidies to avoid harming economic fundamentals.
Chang Chien-yi said that unless the Middle East war turns into a prolonged event lasting more than 150 days, affecting transportation in the Strait of Hormuz, and oil prices rise to a point where CPC Corporation can no longer sustain it and the government cannot provide subsidies or capital increases, the pressure will rise. When CPC Corporation is forced to raise prices and it is reflected in the CPI increase, the Central Bank will step in to implement a tight monetary policy.