Taipei, Taiwan's gross domestic product (GDP) is forecast to grow 2 percent in 2020, despite the impact of the novel coronavirus disease (COVID-19), Chu Tzer-ming (???), head of the Directorate General of Budget, Accounting and Statistics (DGBAS), said Wednesday.
At a hearing held at the Legislative Yuan, Chu said although the spread of the virus is expected to seriously impact the global economy, the Taiwan government's NT$100 billion (US$3.3 billion) stimulus package will mitigate the negative effects on the local economy to some extent.
Despite the impact of the virus on the economy, the stimulus measures "should maintain local GDP growth at no less than 2 percent this year," Chu told lawmakers.
On March 13, the Legislative Yuan passed a special NT$60 billion budget to support efforts to contain thevspread of COVID-19 and cope with its impact on the local economy.
The government will raise NT$30 billion in bond sales and assign a fiscal surplus worth NT$30 billion for the special budget.
In addition, the Executive Yuan already planned to assign an additional NT$40 billion from its own funds to help local industries navigate the current difficulties.
Chu estimated that the NT$100 billion stimulus efforts will account for about 0.5 percentage points of the country's GDP so the fund injection will definitely boost the local economy.
He made the statement in response to Lin Te-fu (???), a lawmaker from the opposition Kuomintang, who asked whether the COVID-19 contagion will plunge the local economy into a recession.
In February, the DGBAS said it expected Taiwan's GDP to grow 2.37 percent in 2020, a downgrade from a forecast of 2.72 percent made in November, citing the impact from the spread of the virus.
Chu said the downgrade was made based on the assumption that the virus would continue to spread over the next three months, adding that if the contagion continues an additional three months, GDP growth for 2020 could be reduced by 0.6-0.9 percentage points to below 2 percent.
However, the additional NT$100 billion in spending is expected to maintain growth at 2 percent at least for this year, Chu reiterated.
Source: Focus Taiwan News Channel