If the plan to build Kuokuang Petrochemical Technology Co’s (國光石化) naphtha cracker plant in Taiwan is scrapped, it would have a positive influence on the nation’s economy in the long term, economists said yesterday.
Premier Wu Den-yih (吳敦義) said on Saturday that Kuokuang Petrochemical might seek an alternative location overseas for its proposed plant, after President Ma Ying-jeou (馬英九) said on Friday that the government would not support the construction of the company’s project in Changhua County.
GDP growth could fall by 2 percentage points if the plant’s construction in Taiwan is halted because domestic investment momentum could drop without the NT$900 billion (US$31.11 billion) two-phase project, not to mention the economic spin-off effects, the Ministry of Economic Affairs said last week.
However, Gordon Sun (孫明德), deputy director of the macroeconomic forecasting center at the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院), said any negative impact on GDP growth could be compensated for with the government’s other -investment projects.
“If Kuokuang Petrochemical’s project is out, the government could come up with projects or construction in other industries and transfer the NT$900 billion investment to them, keeping up the momentum in domestic investment,” Sun said by telephone yesterday.
Furthermore, the ministry’s forecast that 2 percentage points could be shaved off GDP growth would be a long-term effect spread over five to eight years, not just one year, Sun said.
Liang Kuo-yuan (梁國源), president of the Polaris Research Institute (寶華綜合經濟研究院), said that any potential withdrawal of Kuokuang Petrochemical’s investment from Taiwan would only have a limited impact on GDP growth.
“External demand could be -impacted if the project is halted, but the benefits for the local natural environment and water quality could offset this negative impact, as the macroeconomics not only include GDP growth, but also the potential negative consequences brought about by the execution of the project,” Liang told the Taipei Times.
Diagee Shaw (蕭代基), president of the Chung-Hua Institution for Economic Research (中華經濟研究院), said the potential withdrawal of the project could inspire the government into thinking that the development of the petrochemical industry should focus on quality, not just quantity.
The government is now seeking to develop a value-added petrochemical industry, such as the production of optical coatings and upstream materials for solar energy and LED industries, Minister of Economic Affairs Shih Yen-shiang (施顏祥) told a media briefing on Saturday.
Sun agreed that Taiwan could develop a high-end petrochemical industry by applying its successful development experience in the development of its semiconductor foundry industry.
“We should let investments in low-value and high-contamination sectors be made overseas, while retaining the value-added sectors here,” Sun said.
The government should also consider transferring the budgeted funds for the Kuokuang project to bio-technology, tourism and other manufacturing industries with value-added components, compensating for any potential dip in GDP growth, should the project be withdrawn, Sun said.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01