Taiwan eyes domestic demand and exports to boost economy

  • Date: 2017-09-21
  • Source: Department of Information Services, Executive Yuan

Premier Lai Ching-te today received a briefing from the National Development Council on the state of Taiwan’s economy, saying the government must spur domestic demand as well as foreign exports to keep the economy growing stronger.

Citing the August forecast by the Directorate-General of Budget, Accounting and Statistics, the premier said Taiwan’s economy is expected to grow by 2.11 percent in 2017, and that the government is cautiously optimistic about the economic outlook.

With the global economy looking to grow by about 3 percent this year, Taiwan would do well to redouble its efforts. There are still considerable risks, however, as this optimism depends primarily on strong export performance, which in turn is tied to the global economy. The government must therefore continue to broaden its objectives and work together, the premier said.

The administration is pushing several strategies for economic growth, Premier Lai said. The first consists of fiscal policy to spur domestic demand. In addition to the Forward-looking Infrastructure Development Program, the government recently approved a 3 percent pay raise for public-sector employees starting next year, and companies in the private sector are following suit. These measures are expected to contribute positively to private consumption and economic growth.

The second strategy is restructuring industries to stimulate domestic demand. The government is aggressively promoting the “five plus two” innovative industries program, which is designed to transform Taiwan’s economic structure and help private companies embrace innovation as well.

The third means involves foreign exports. Under the New Southbound Policy, the whole of government including Minister without Portfolio John Deng, the Ministry of Foreign Affairs, and the Ministry of Economic Affairs are all striving to promote Taiwan’s integration into the regional economy, whether through bilateral or multilateral channels.

The fourth is monetary policy, the premier continued. Following the U.S. Federal Reserve’s announcement of plans for trimming its balance sheet, the U.S. dollar is expected to rally in the months ahead while the New Taiwan dollar will depreciate accordingly. These developments will be positive for Taiwan’s exporters but challenging for domestic demand.

On the whole, the global economy is heading up, and the premier hopes government agencies will achieve their objectives by implementing their policies steadily and pragmatically.