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Smaller budget deficit forecast for 2005

The government forecasts its bud-get deficit will narrow next year from a record and it will sell fewer bonds.

The government predicts the gap between spending and income will narrow to NT$295.5 billion (US$8.7 billion) from a record NT$312.9 billion estimated for this year, Chen Ching-tsai, deputy chief of the Directorate General of Budget, Accounting and Statistics, said in a phone interview.

The government plans to issue NT$255 billion of debt next year, compared with NT$265 billion in bonds this year, Chen said.

The deficit forecast doesn't include a planned special appropriation of NT$500 billion to be spent on public works in the next five years, nor NT$610.8 billion in proposed arms purchases from the US over a 15-year period, according to Chen.

"What we see is an improvement on the surface, but it isn't clear how the real condition is," said Cheng Cheng-mount (鄭貞茂), the chief economist for Citibank Taiwan.

"Taiwan's fiscal transparency isn't that high," Cheng said.

"Government income from taxes next year is expected to improve, because of the improvement in the economy," Chen said.

The government has been running deficits every year since 2000.

GDP, or the total value of goods and services produced, is forecast to grow 5.41 percent this year, compared with 3.24 percent last year.
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