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Commercial Times: Short-term stimulus measures

Commercial Times: Short-term stimulus measures

With Taiwan's GDP growth for this year projected at just 1.56 percent and the local stock market continuing to fall, the Cabinet on Thursday introduced a set of short-term measures in a bid to stimulate the economy. The measure we feel is most worth looking forward to is the plan to form a NT$70 billion to NT$80 billion acquisition investment fund in cooperation with the private sector. It will be the first time the government gets directly involved in the area of acquisitions, and government investment will account for 30 percent to 40 percent of the new fund. According to the Cabinet, the new fund will become operational in September, breaking the stereotype that the government is inefficient in promoting policies. On monetary policy, the Cabinet reiterated that it will continue to adopt a moderately loose approach. We believe that the central bank is being rational and pragmatic for not joining the currency devaluation competition across the region. Although a weaker currency is favorable to exports, it will increase the cost of imports. To boost the momentum of private sector investment, the Cabinet agreed to allow life insurance companies to invest in public construction projects. But further investigation is needed to assess the policy's advantages, disadvantages and risks it brings to capital markets. Finally, the number of independent Chinese travelers allowed into Taiwan will be increased from 4,000 per day to 5,000 per day, while Chinese tourists entering Taiwan via the "mini three links" will be doubled to 1,000 per day. This measure is the most substantial and has the best chance of success. (Editorial abstract -- Aug. 21, 2015) (By Y.F. Low)


Updated : 2021-09-17 14:00 GMT+08:00