Jul 11, 2017 Culture Comments Off on Investment plan to boost GDP growth by 0.1 percentage points per year
Taipei--The massive investment under the newly implemented "forward-looking infrastructure plan" is expected to raise Taiwan's gross domestic product (GDP) growth by 0.1 percentage points a year on average over the next four years, Chu Tzer-ming (???), chief of the Directorate General of Budget, Accounting and Statistics (DGBAS), said Tuesday.
Speaking at a news conference in which a budget for the first-stage implementation for the four-year investment plan was unveiled by the Cabinet, Chu said that the total of NT$420 billion (US$13.73 billion) investment planned over the four-year timeline will boost the local economy.
In a meeting held that day, the Executive Yuan approved the budget plan in which the government will spend NT$108.9 billion for the phase-one implementation of the NT$420 billion four-year infrastructure plan during the period of September 2017 to December 2018. The government will write additional budget for the rest of the plan.
Over the period of September 2017 to August 2021, Chu said, the GDP is expected to increase by NT$506.5 billion in nominal terms, while the economy is estimated to grew NT$470.5 billion in real terms after adjustment for inflation.
The increase in real GDP translates into an average of a 0.1 percentage point increase in GDP a year over the four-year period, Chu said.
The Cabinet meeting to approve the budget came after the Legislative Yuan passed Special Budget Statute for Forward-Looking Infrastructure last week.
Under the budget of NT$108.9 billion for the first stage, the Executive Yuan will spend NT$17.07 billion on rail transportation, NT$25.67 billion on improving the water environment, NT$8.12 billion on green energy development, NT$16.17 billion on digital development and NT$35.41 billion on urban and rural development.
The Cabinet will also invest NT$1.96 billion on building a friendly environment for child-raising, NT$310 million on safeguarding food safety, and NT$4.2 billion on cultivating talent.
The infrastructure development plan has been embraced by President Tsai Ing-wen's (???) administration as its anchor economic stimulus project.
However, the opposition Kuomintang (KMT) has cast doubt over the investment, saying that the massive funding will hurt the financial conditions of local governments.
In response to the KMT's criticism, Chu said that local governments will need to raise debts worth about NT$225 billion to finance the infrastructure plan, but out of the NT$225 billion, more than NT$135 billion will be in the form of so-called self-liquidating loans, which will be repaid with revenue generated by the assets invested.
According to Chu, excluding self-liquidating loans, local governments will have to repay only NT$90 billion on their own, which is expected not to be a heavy financial burden.
Source: Focus Taiwan News Channel
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