Taiwan announces huge stimulus package in face of uncertain times
Move could add nearly NT$1 trillion to island’s economy, premier says
Taiwan announced a NT$882.4 billion (HK$225 billion) stimulus package yesterday to boost its export-driven economy in the face of uncertainty from its two biggest trading partners, the United States and mainland China.
Taiwan’s trade-reliant economy is showing signs of recovery, but is highly vulnerable to protectionist policies from US President Donald Trump and rising competition from mainland manufacturers, as well as increasing political tensions with Beijing.
In a bid to make the economy more balanced, Taiwan’s government is looking for domestic growth drivers that dovetail with President Tsai Ing-wen’s push to roll out green energy, improved utilities, better transport and telecommunications networks, and innovative technology. The stimulus package is expected to focus on infrastructure,with spending spread out over eight years.
Taiwanese Premier Lin Chuan said the plan could add nearly NT$1 trillion to the island’s gross domestic product (GDP), while conceding that growth would remain largely export-driven.
“But I must admit that when economic growth is not solid, it’s still necessary to take this action to bolster the economy,” the premier said.
“It’s better to do this sooner rather than later.”
Taiwan’s central bank was widely expected to hold interest rates steady later in the day as the government turned to fiscal stimulus to keep the economic recovery on track.
Taiwan’s export orders grew at their fastest pace in 61/2 years in February on strong global demand for electronics that is bolstering makers of memory chips smartphones and flat panels.
“It would be appropriate to expand consumption at home,” Taiwan’s central bank Governor Perng Fai-nan said in a statement earlier in the day, saying that would provide some cushion from external risks.
“China has been upgrading its supply chains,” the governor said.
“President Trump is also asking for manufacturers to go back to the US.”
The stimulus package is subject to legislative approval.