UPDATE 2-Taiwan cbank raises economic growth forecast, stands pat on rates

* Benchmark discount rate left unchanged at 1.125% as expected

* Taiwan raises 2021 growth forecast to 4.53%

* Sees strong export momentum, mild inflation (Adds details, quotes, byline)

TAIPEI, March 18 (Reuters) - Taiwan’s central bank revised up the island’s growth outlook for the year on Thursday as strong exports bolstered the trade-reliant economy in the face of the coronavirus pandemic, and left its policy rate unchanged as expected.

Taiwan has weathered the health crisis better than its neighbours by keeping infections largely at bay, while its export-reliant economy has gained from global demand for its technology products as many people work from home.

That trend is expected to continue and help underpin a rapid economic recovery this year.

At its quarterly meeting, the central bank kept the benchmark discount rate at a record low of 1.125%, as expected by all 12 economists in a Reuters poll.

This is the fourth time in a year it has decided to keep rates unchanged fire. It last cut rates at its March, 2020 quarterly meeting.

The central bank also raised its 2021 estimate for gross domestic product (GDP) growth to 4.53% from 3.68% forecast in December. Growth cooled to 3.11% in 2020 but snapped back sharply in the fourth quarter from a steep contraction early in the year.

The bank said in a statement it saw stronger growth momentum for exports as well as “stable” economic growth this year, boosted by “hot demand” for the island’s tech products as well as a rebound in consumer confidence and retail sales at home.

Taiwan’s economy will “grow stably” with a mild inflation outlook, and a continuation of accommodative monetary policy will help support the growth, it added.

Taiwan’s decision to hold fire comes after the U.S. Federal Reserve signalled it was in no hurry to raise interest rates through all of 2023 even as it saw a swift recovery in the world’s largest economy.

Taiwan’s manufacturers such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) the world’s largest contract chip maker, are a key part of the global supply chain for technology giants such as Apple Inc. (Reporting by Liang-sa Loh and Yimou Lee; Writing by Ben Blanchard; Editing by Kim COghill)