The government is looking for a boost to the nation's economic strength from increased private investment as it projects private investment will jump by around 20 percent this year, an official said yesterday.
"Taiwan's private investment is expected to increase to NT$860 billion this year, buoyed by a strong economic recovery at home and abroad," Minister of Economic Affairs Lin Yi-fu (林義夫) told an annual press conference yesterday.
Consumer and business confidence was shaken by the outbreak of SARS and the uncertainty surrounding the war in Iraq during the first half of last year.
A slump in private investment and consumption last year hampered the nation's economy, as measured by GDP growth, said Lin Jin-lung (
The SARS outbreak kept most consumers at home and resulted in negative economic growth of 0.08 percent during the April to June period, according to Directorate General of Budget, Accounting and Statistics' (DGBAS) data.
But the nation's economy began to regain its footing in the second half following the recovery of the world economy, and especially the solid recovery in the US. As a result, investment by both local companies and multinational firms in Taiwan amounted to some NT$720 billion for the whole of last year, after local businesses felt confident about investing in new plants and equipment.
Academia Sinica predicted Taiwan's private investment would grow a solid 10.13 percent this year after recording a negative 0.23 percent growth last year, as some costly construction projects from local semiconductor and flat-panel makers get under way, and with projected economic improvement around the world.
"We have already seen the signs recently, with significant growth in the import of machinery and manufacturing equipment," Lin said.
The government is betting on a projected increase in private investment to beef up Taiwan's GDP growth in an election year. The nation will hold its presidential election in March.
Taiwan's GDP is forecast to grow by 4.10 percent this year, up from 3.15 percent last year, DGBAS said in November. Academia Sinica predicts the nation's economy will grow 4.13 percent this year, up from the 3.19 percent it calculated for last year.
"While it might be a challenge for us, we believe we have a great opportunity to achieve the [NT$860 billion in private investment] goal," said Chen Chao-yih (
The ministry, however, believes the overall economy, as measured by GDP, will expand next year by 5 percent or more, if the growth target for private investment is hit, from the nearly 4 percent estimated for last year, Lin said.
Nonetheless, the ministry did not elaborate on what the government would do to reach the 20-percent growth target, although it said the Taiwan Business Alliance Conference that it held in October last year, as part of its effort to lure foreign investment, would bear fruit this year.
The ministry said it expects 40 foreign companies, including Dell Inc, Hewlett-Packard Co, AKT Inc and Alcatel SA would set up research and development centers in Taiwan by 2006.
In addition, the ministry is pinning its hopes on local tech companies' expansion in capital investment as the global economic turnaround takes hold. AU Optronics Corp (
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