TAIPEI
Taiwan announced a 882.4 billion Taiwan dollar (Dh106.24 billion, $29 billion) stimulus package on Thursday to boost its export-driven economy in the face of uncertainty from its two largest trading partners, the United States and China.
Taiwan’s trade-reliant economy is showing signs of recovery, but it is highly vulnerable to protectionist policies from US President Donald Trump and increasing competition from Chinese manufacturers, as well as political tensions with Beijing.
Central bank chief Perng Fai-nan, speaking at a news conference after the rate decision, estimated the stimulus would help the economy expand by 2 per cent this year.
The stimulus plan, which had been well flagged, will be spread over eight years and the infrastructure buildout will target rail, water, green energy and the digital economy, according to the government’s proposal. Other projects will aim to even out the urban-rural divide.
The plan has the potential to create around 40,000 to 50,000 jobs, the cabinet said.
Just hours after Premier Lin Chuan unveiled the stimulus, which still requires parliamentary approval, Taiwan’s central bank kept its key policy rate steady after its quarterly policy meeting, as widely expected.
The central bank cited signs of an export-led economic recovery and mild inflation for its decision to stand pat.
But it also warned of uncertainties over US policy and risks from large and frequent flows of capital in and out of Taiwan, which it said was affecting its financial markets.
“In order to support the economic recovery, it is necessary to maintain a moderately easy monetary policy. We believe that maintaining an unchanged policy rate will help the overall economic and financial development,” the central bank said in a statement.
