The government is seeking to pull the nation out of economic gloom by increasing spending on public construction projects next year, but academics expressed doubt yesterday that the efforts would be adequate to counter the global slowdown that is hurting foreign trade.
The Cabinet will brief President Ma Ying-jeou (馬英九) on Thursday on its 2009 fiscal budget proposal, projected at NT$1.83 trillion (US$59.68 billion), up 6.9 percent from this fiscal year.
The funding earmarked for economic development is forecast to surge 20 percent, topping all other outlays, with NT$210 billion to be spent on public works, the Council for Economic Planning and Development said.
The council said the government’s economic strategy would focus on stimulating growth and stabilizing consumer prices to cope with inflation and other challenges at home and abroad.
Norman Yin (殷乃平), a professor at National Chengchi University’s Money and Banking Department, said that by boosting public spending, the government would expand domestic demand and raise the GDP, but it would not boost foreign trade — the mainstay of the nation’s exported-oriented economy.
Official statistics showed that export orders rose 9.3 percent year-on-year to US$31.36 billion in June, the lowest growth since March last year, because of decelerating growth in electronics and precision equipment sales.
“The spending plan will not be able to offset falling demand from the US and other trade partners,” Yin said by telephone.
The bulk of the construction budget, 53.3 percent, will be used to carry out Ma’s campaign pledge to turn Taiwan into “an intelligent country.” About NT$45.9 billion is earmarked for transportation infrastructure and NT$18.2 billion will be spent on flood control projects.
The council said the expenditure could create 180,000 jobs and raise GDP growth by 1.68 percent next year.
Daw Jaw-yang (戴肇洋), a researcher at the Taiwan Research Institute (台綜院), said it would be an uphill struggle for the government to fight inflation caused by rising fuel and raw material costs.
“The government is poorly equipped in the battle against imported inflation as the country has no control over global oil or food prices,” Daw said.
As long as crude and raw material prices remain volatile, any optimism may prove premature, Daw said, adding that several economic research bodies had already trimmed their GDP growth forecasts for this year.
Last week, the Taiwan Institute of Economic Research (台經院) cut its GDP growth forecast to 4.27 percent from its April prediction of 4.3 percent on concerns of lower consumer spending. Ten days earlier, the Chung-Hua Institution for Economic Research (中經院) trimmed its forecast from 4.76 percent to 4.5 percent.
COMPETITION: AMD, Intel and Qualcomm are unveiling new laptop and desktop parts in Las Vegas, arguing their technologies provide the best performance for AI workloads Advanced Micro Devices Inc (AMD), the second-biggest maker of computer processors, said its chips are to be used by Dell Technologies Inc for the first time in PCs sold to businesses. The chipmaker unveiled new processors it says would make AMD-based PCs the best at running artificial intelligence (AI) software. Dell has decided to use the chips in some of its computers aimed at business customers, AMD executives said at CES in Las Vegas on Monday. Dell’s embrace of AMD for corporate PCs — it already uses the chipmaker for consumer devices — is another blow for Intel Corp as the company
STIMULUS PLANS: An official said that China would increase funding from special treasury bonds and expand another program focused on key strategic sectors China is to sharply increase funding from ultra-long treasury bonds this year to spur business investment and consumer-boosting initiatives, a state planner official told a news conference yesterday, as Beijing cranks up fiscal stimulus to revitalize its faltering economy. Special treasury bonds would be used to fund large-scale equipment upgrades and consumer goods trade-ins, said Yuan Da (袁達), deputy secretary-general of the Chinese National Development and Reform Commission. “The size of ultra-long special government bond funds will be sharply increased this year to intensify and expand the implementation of the two new initiatives,” Yuan said. Under the program launched last year, consumers can
Citigroup Inc and Bank of America Corp said they are leaving a global climate-banking group, becoming the latest Wall Street lenders to exit the coalition in the past month. In a statement, Citigroup said while it remains committed to achieving net zero emissions, it is exiting the Net-Zero Banking Alliance (NZBA). Bank of America said separately on Tuesday that it is also leaving NZBA, adding that it would continue to work with clients on reducing greenhouse gas emissions. The banks’ departure from NZBA follows Goldman Sachs Group Inc and Wells Fargo & Co. The largest US financial institutions are under increasing pressure
FUTURE TECH: Nvidia CEO Jensen Huang would give the keynote speech at this year’s Consumer Electronics Show, which is also expected to highlight autonomous vehicles Gadgets, robots and vehicles imbued with artificial intelligence (AI) would once again vie for attention at the Consumer Electronics Show (CES) this week, as vendors behind the scenes would seek ways to deal with tariffs threatened by US president-elect Donald Trump. The annual Consumer Electronics Show opens formally in Las Vegas tomorrow, but preceding days are packed with product announcements. AI would be a major theme of the show, along with autonomous vehicles ranging from tractors and boats to lawn mowers and golf club trollies. “Everybody is going to be talking about AI,” Creative Strategies Inc analyst Carolina Milanesi said. “From fridges to ovens
RSS