Taiwan Reveals Cautious First Budget As Tsai Pledges Growth
Fahad Shabbir (@FahadShabbir) Published August 18, 2016 | 12:33 PM
TAIPEI, (UrduPoint / Pakistan Point News - 18th Augst,2016) - Taiwan's new government unveiled its first budget Thursday as it tries to kickstart the island's fragile economy, but the cautious spending plan raised questions over whether it was investing enough.
President Tsai Ing-wen was voted in by a landslide in January partly because of public anger over stagnant wages, lack of job opportunities and a rising cost of living. Trade deals with China under former leader Ma Ying-jeou were seen as helping big business, not the ordinary citizen.
Tsai has pledged to boost innovation in several sectors, including technology and defence, as well as diversifying away from reliance on trade with China. But the first budget under Tsai, announced by the cabinet, only raised spending for 2017 by 1.1 percent.
The biggest increases were in education and social welfare. Defence was given a marginal lift. The budget also included Tw$186.9 billion ($5.96 billion) on public works and Tw$45.9 billion to foster five key industries flagged by Tsai, including creating a "silicon village" for Asia.
Analysts said it may be too conservative to provide meaningful growth. "This is perhaps much too cautious given that the world is going through a longer period of stagnant growth," Angela Hsieh, an economist at Barclays, told AFP.
Hsieh compared it with Korea, which already has higher growth momentum than Taiwan and may be increasing spending by at least 3.5 percent to boost sluggish performance. But Premier Lin Chuan defended the plan to reporters, saying economic growth could not be provided through government investments alone.
"The purpose behind the government's (investments) actually is to create a good environment for private investments to increase," he said after the budget was approved by the cabinet. The budget will be deliberated in parliament, with a date yet to be set. Traditionally an export-driven technology hub, Taiwan has suffered from increased competition and stagnating demand globally.
In May the government revised down its 2016 growth forecast to 1.06 percent, down from earlier prediction of 1.47 percent. However, the island managed to come out of recession in the second quarter after three successive quarterly contractions, thanks to demand for components for Apple's new iPhone 7.
Tsai is under pressure to show results as her approval rating this week slipped to under 50 percent for the first time. Ties with China have deteriorated since she took office in May, as Beijing does not trust her China-sceptic Democratic Progressive Party.
Related Topics
Recent Stories
Rafiq-ul-Hujajj Committee to organize 2nd training session for pilgrims in Abbot ..
Defence Minister leads Pakistan's delegation to Kazakhstan SCO moot
4-day book fair opens
30 wheelchairs donated
11 dead, 1295 injured in road accidents
46 vehicles impounded for traffic violations
PSX gains 771 points
PITB HR Wing organizes Eid Milan celebration for children at PITB Day Care Cente ..
Cabinet briefed on progress of PIA privatization
Meeting held to streamline trade between Pak-Afghan , Central Asian Republics
SONY x TECNO - is this for real?
Progress of Aaghosh, Bunyad, Khud Mukhtar programs discussed
More Stories From Business
-
PSX gains 771 points
37 minutes ago -
Pakistan, US hold 7th TIFA meeting to strengthen trade and investment ties
1 hour ago -
Meeting held to streamline trade between Pak-Afghan , Central Asian Republics
39 minutes ago -
Coca-Cola invests an additional $22 million in Pakistan
1 hour ago -
SECP Introduces SECP-XS: A swift complaint resolution platform
1 hour ago -
SBP to announce monetary policy on April 29
28 minutes ago
-
London stocks hit new record peak on takeovers
28 minutes ago -
Rupee sees slight recovery against US dollar
28 minutes ago -
Kitchen items’ prices ease as weekly inflation falls by 1.1%
3 hours ago -
Shipping Activity at Port Qasim
4 hours ago -
Yen falls further as Bank of Japan stands pat on rates
28 minutes ago -
Foreign Exchange (Forex) Open Market Rate in Pakistan 26 April 2024
28 minutes ago