Forecast Revision Overview
Citigroup and UBS have both raised their 2026 real GDP growth forecasts for Taiwan to 9.9%. Citigroup’s strategist Adrienne Lui noted that the upgrade is driven by ultra‑strong and broadening export momentum. UBS economist William Deng increased the bank’s estimate from the prior 8% to 9.9%, attributing the stronger outlook to the recent peace deal between the United States and Iran, which he said should help reduce geopolitical uncertainties.
Inflation Outlook
Citi expects consumer‑price inflation in Taiwan to climb to 2.2% in 2027 as domestic inflationary pressures build, a view that diverges from the Taiwan central bank’s projection of easing inflation in the next year.
Interest‑Rate Expectations
Citi maintains that the Central Bank of China (CBC) will commence a series of three 12.5‑basis‑point rate hikes, beginning in December 2026, followed by additional increases in June 2027 and December 2027. In contrast, UBS anticipates the CBC will keep the policy rate unchanged for the near term, citing effective inflation smoothing by the government, modest growth in domestic loan volumes, and overall moderate changes in housing prices. UBS added that, if required, the CBC could deploy selective measures targeting specific areas of the economy.
Additional Context
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