The economy could grow by 3 percent this year if exports are successfully boosted by the government’s trade promotion policies, a top Ministry of Economic Affairs official said yesterday.
“Exports account for up to 70 percent of the nation’s GDP. The ministry is therefore proposing measures to boost them,” Vice Minister of Economic Affairs Bill Cho (卓士昭) told a meeting of the legislature’s Economics Committee.
“It is still possible the nation will experience annual GDP growth of 3 percent if the economy achieves estimated growth rates over the coming quarters,” he added.
Cho made the comments after lower-than-expected first-quarter GDP growth of 1.54 percent was reported on Tuesday. The government in February had forecast that the economy would grow by 3.26 percent in the first quarter.
Cho attributed a disappointing first quarter to macroeconomic uncertainties in global markets, which dragged down the nation’s exports and cooled domestic demand.
Exports grew 2.4 percent year-on-year in the first three months, the Directorate-General of Budget, Accounting and Statistics reported on Tuesday. In February, the agency forcast that exports would grow 4.71 percent in the first quarter.
Asked by legislators if the government is considering a consumer voucher plan to boost the economy, Cho said such a measure would just increase the debt burden.
“Consumer vouchers can offer limited help to the economy in the long term and should only be used during extreme times,” he said.
On Tuesday, Minister of Economic Affairs Chang Chia-juch (張家祝) said the ministry would continue to promote policies aimed at invigorating domestic investment and exports.
“That first-quarter GDP missed expectations doesn’t mean that subsequent GDP performance will also be disappointing. We should adopt a more optimistic outlook on the results,” Chang said.
However, a China-based Taiwanese business said on Tuesday that difficulties in land acquisition tops a list of bureaucratic red tape hindering its efforts to invest at home.
Bert Huang (黃明和), president of Victor Taichung Machinery Works Co (台中精機), said in a forum held by the ministry’s Department of Investment Services that the biggest issue faced by many China-based Taiwanese businesses in their efforts to invest in Taiwan is difficulty acquiring land.
Many small and medium-sized businesses have also found it difficult to obtain plant registration certificates in central Taiwan, which means they have been unable to establish facilities in industrial parks in the region, he said.
The high cost of acquiring land also does not help the situation, Huang said.
For example, land prices in the Taichung Industrial Park have risen to between NT$150,000 and NT$160,000 (US$5,100 to US$5,400) per ping (3.3m2), he said.
Representatives of the World Taiwanese Chambers of Commerce also said at the forum that taxation of foreign income under the Alternative Minimum Tax also deters businesses from returning to Taiwan to invest.