Taiwan's economy is booming on the AI boom, and two big state-backed financial groups expect the central bank to leave interest rates alone for a tenth meeting in a row — good news for borrowers and for tech exporters.

• Taiwan's economy grew nearly 13% in the second quarter, its best in half a century, driven by AI servers, advanced chips and cloud demand.
• First Financial and Hua Nan Financial both see little chance of a rate hike in September, and expect rates flat through year-end.
• Middle East fighting is pushing up energy costs and inflation risk, but government price controls are keeping local inflation in check.
• Growth is lopsided: high-tech is thriving while traditional industries lag, so the central bank has to avoid squeezing the weaker half.
• The Fed is also expected to hold, even though a few officials pushed for a hike in July.

Outlook: Taiwan should stay on hold with inflation hovering near 2%, unless the Middle East conflict or energy prices force a rethink.