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Cabinet plans NT$500 billion fund to stimulate economy

Cabinet plans NT$500 billion fund to stimulate economy

Taipei, July 28 (CNA) The Executive Yuan has planned a fund of NT$500 billion (US$15.87 billion) to stimulate Taiwan's export-oriented economy, which has become sluggish amid a slowdown in global trade.
The plan was disclosed after Premier Mao Chi-kuo asked several government agencies to study potential stimulus measures at a time when the domestic and world economies are showing signs of weakness.
National Development Council (NDC) chief Duh Tyzz-jiun said at a news conference Monday that the NT$500 billion will be directed at "non-small and medium-sized enterprises" and used as working capital to expand their investments.
Under the funding plan, the government will provide guarantees to larger enterprises that need loans to expand, hoping to strengthen their competitive edge in the global market.
Financial Supervisory Commission Chairman Tseng Ming-chung, who was involved in planning the large fund, said his commission will meet with other related government agencies to hammer out the details on how the NT$500 billion fund will operate.
According to government sources, the NT$500 billion will be provided by 39 banks, which will set their own interest rates. The maximum loan allowed to individual enterprises will be decided at the upcoming meeting.
To be eligible for the loans, manufacturers must have paid-in capital of at least NT$80 million and a workforce of 200, while service companies must have sales of at least NT$100 million a year or a workforce of at least 50 people.
Taiwan's exports and overall economy have turned sluggish as global demand has fallen.
In June, Taiwan's exports fell 13.9 percent from a year earlier, marking the fifth consecutive month in which the country's exports registered a year-on-year drop.
In the first six months of this year, exports were down 7.1 percent from a year earlier.
While some business leaders have called for further depreciation of the Taiwan dollar to make Taiwanese products cheaper in the world market, others have urged the government to push for more investment by exporters to boost their competitiveness and be better prepared to take on challenges from foreign rivals.
In May, the government cut its forecast for Taiwan's 2015 GDP growth to 3.28 percent from 3.78 percent. The government is scheduled to update its forecast again in mid-August. (By Tang Pei-chun and Frances Huang)


Updated : 2021-09-18 06:11 GMT+08:00