The government will focus on three priorities next year in order to realize its economic growth target, with stimulating domestic demand topping the list, an official with the Council for Economic Planning and Development (CEPD) said yesterday.
Also high on the work agenda are stepping up research and development as well as boosting employment and narrowing the wealth gap and urban-rural divide, the official said.
He made the remarks after CEPD commissioners passed the country's economic development plan for next year one day earlier than scheduled. The plan set an economic growth target of 4.6 percent, a GDP of US$16,886, the unemployment rate at 3.9 percent and inflation below 2 percent.
According to the official, the US economy is expected to slow down next year, which could have a negative effect on Taiwan's export growth. This is why Taiwan should spur domestic demand to bolster its continued economic expansion, the official said.
To realize this goal, he said, the government will continue expanding public investment, accelerating relaxation of regulations governing the service industry, fine-tuning the domestic investment environment and stimulating the financial sector.
"Through all these measures, we expect to see a 3 percent growth in private consumption in real terms in 2007," the official said.
With gross fixed capital formation expected to maintain the traditional level of approximately 20 percent of GDP, the official said, domestic demand will be able to contribute to more than 60 percent of next year's economic growth.
On R&D promotion, he said, the government's budget for next year for scientific and technological development will increase 10.8 percent from this year's level -- higher than the average 7.9 percent growth posted in the past three years.
"We hope our R&D investment will spawn a cluster effect by attracting more high-tech companies to invest in Taiwan as well as enhance our labor productivity and expand value-added output," the official said.
While pursuing economic growth, the official said, the government will not overlook the importance of achieving balanced development.
"Equal emphasis will be given on creating jobs so that local citizens can make a living," the official said, adding that the government's target is to keep the unemployment rate below 4 percent throughout next year.
The official added that the government will continue working to narrow the gap between the rich and the poor as well as bridge the divide between urban and rural regions.
"Our target is to pull the wealth gap between the richest 20 percent and the 20 percent down to below six-fold," the official said.
Next year will be the first year of the first three-year stage of a long-term national development plan valid until 2015, which is aimed at increasing investment in Taiwan, creating jobs, narrowing the wealth gap and balancing development in metropolitan areas and the countryside.
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