Investfinance.pro – Bank of America (BofA) expects core inflation in Taiwan to remain low. The rise in food prices, in their opinion, is temporary, so it is recommended to emphasize the dynamics of core inflation.
The bank’s experts also emphasize that a persistently strong Taiwan dollar (TWD) has a disinflationary effect by making imports cheaper, especially energy, and at the same time may weaken export activity by reducing external demand.
BofA estimates that technology exports will remain competitive, while exporters in other sectors may struggle due to the strong currency and weakening demand.
Thus, while a strong TWD is beneficial for importers, especially in energy, it has the potential to hit non-technology exporters, which could lead to a decline in overall exports.