The planned distribution of shopping vouchers would help boost retailers and other service sectors, but more stimulus measures are needed to lift domestic demand amid the looming global recession, economists said yesterday.
In another bid to mitigate the effect of external financial shock, Premier Liu Chao-shiuan (劉兆玄) unveiled details yesterday afternoon of a plan to give out shopping vouchers valued at NT$3,600 (US$108.32) to all citizens to help businesses weather the economic downturn.
The measure, intended to raise GDP growth by 0.64 percentage points next year using NT$82.9 billion (US$2.5 billion) in special funding, came two days before the state statistics agency is scheduled to update major economic pointers.
PHOTO: CHANG CHIA-MING, TAIPEI TIMES
Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), said that the policy could trigger a positive business cycle as increasing consumer spending would boost domestic demand.
However, Liang said it was too early to gauge its full impact.
“With consumers spending more, industries will supply more goods and services,” Liang said. “The trend may spell more employment opportunities and increase personal disposable income.”
The timing of the distribution will play a crucial role in the policy’s effectiveness, the academic said, suggesting that the government carefully consult the economic indicators to be released tomorrow.
“The vouchers would have less effect if they were distributed when people have just received their pay or as GDP hits a new low,” Liang said. “The longer the distribution takes, the weaker its impact on the economy will be.”
The Cabinet still needs to obtain approval from the legislature before it can distribute the vouchers.
Liang said that more stimulus measures would be necessary if the nation’s economic situation turns out to be worse than expected.
The government is set to lower next year’s GDP growth forecast, with all major trading partners, except China, expected to post negative growth.
Chen Miao (陳淼), a research fellow at the Taiwan Institute of Economic Research (台經院), said domestic service providers may breathe a long-awaited sigh of relief once the policy is put into practice.
The sectors have suffered falling profit margins on surging raw material costs and slumping consumer spending, Chen said.
But Chen said it remained to be seen if the plan would turn out a burden on the national treasury, with the government already promising a spate of tax cuts and outlays.
Christina Liu (劉憶如), the top adviser at Daiwa Institute of Research Co, said the stimulus measure would be good for domestic consumption and economic growth, but that the government should take steps to prevent forgery and other problems to maximize its impact.
To that end, Liu said it made more sense for the government to give the vouchers to individuals rather than households whose sizes vary.
“It would not be fair for singles to receive the same amount as families with children,” Liu said.
The Cabinet originally intended to distribute the vouchers to all individual households with an annual income of NT$1.2 million and below, but policymakers argued the restriction would have turned the plan into a welfare subsidy rather than an economic stimulus.
“There is no need to exclude the rich from the measure as they pay their share of taxes,” Liu said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last