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.
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
RSS