Taiwan to Roll Out Infrastructure Spending

Taiwan will spur domestic demand with a mid- to long-term infrastructure development plan, President Tsai Ing-wen said, augmenting a more conservative spending proposal released this year.

“Next March, the cabinet will unveil a comprehensive, forward-looking infrastructure development plan as a blueprint,” Tsai, 60, said Saturday in a New Year’s Eve address and press briefing in Taipei, Bloomberg reported.

Tsai’s cabinet, led by Premier Lin Chuan, earlier proposed a budget that only included moderate increases to overall spending and about $6 billion for public-works outlays. As the economy stagnated, central bank governor, Perng Fai-nan, stressed the need for government investment in areas such as infrastructure while Lin was more focused on the deficit. The budget is still being debated in Taiwan’s legislature.

Tsai said Saturday that additional spending could be added to the budget for infrastructure development, or a special budget could be approved. The government will work to encourage private investment to follow suit, the president said.

“The most important mission in 2017 is to stimulate Taiwan’s economy by all means,” she said.

Taiwan’s economy was set to grow by 1.35% in 2016 and 1.87% in 2017, the government forecast in November. The central bank kept its benchmark interest rate unchanged in December and predicted mild economic growth in 2017. A new iPhone model may bolster Taiwanese electronics makers while rising oil prices will boost exports of petrochemical products, according to economists.

Relations with Taiwan’s biggest export destination, mainland China, became increasingly strained over the course of 2016 and in particular, after a Dec. 2 congratulatory phone call between US president-elect Donald Trump and Tsai, which broke with protocol under the US’s One-China policy.