Wed, May 28, 2003 - Page 1 News List

Government seeks NT$300bn to boost SARS-hit economy


President Chen Shui-bian (陳水扁) has asked the Executive Yuan to push for a NT$300 billion budget to buffer the impact of the SARS epidemic, Chinese-language media reported yesterday.

The plan is aimed at expanding public construction and public services over the next three years, the report said.

Premier Yu Shyi-kun plans to visit Legislative Yuan speaker Wang Jin-pyng (王金平) and opposition caucus leaders to canvass support for the plan, the reports said.

The Council for Economic Planning and Development (CEPD) started integrating local development projects into the plan during annual planning talks with local government heads in March, the report said.

An official from the CEPD said the plan will include infrastructure projects such as roads and bridges, and will also coordinate ongoing projects such as the high-speed rail link to give the flagging economy a boost.

The legislature has already passed an NT$50 billion SARS prevention and relief budget.

Earlier this month, the Directorate General of Budget, Accounting and Statistics (DGBAS) yesterday announced that first quarter economic growth has fallen to 3.21 percent from 4.22 percent for the fourth quarter of last year.

The Chung-Hua Institution for Economic Research predicted on April 17 that if SARS is not under control by year end, GDP growth for this year will be dragged down to 2.71 percent.

The government expects the slide in GDP growth to be slowed by various SARS-relief measures and the passage of the NT$50 billion public construction program.

But Yu said the package would not be enough.

"While the aid package may temporarily help industries hard hit by SARS, those measures won't be enough to support them if SARS drags on," Yu said earlier this month.

Economy gets blue light

Meanwhile, the nation's economy further deteriorated last month and was likely to continue struggling this month as a result of the Iraq war and the SARS outbreak, according to a government report published yesterday.

The report by the CEPD showed the index of leading indicators last month stood at 98.2 points, down 1 percent from March.

The index, which gauges economic activity for the following three to six months, showed a "blue" light last month. The light was "yellow-blue" in the first three months of the year.

In the council's five-color grading system, yellow-blue represents economic sluggishness and blue represents recession.

The last time the index showed blue light was in February last year.

Hu Chung-ying (胡仲英), director of the council's economic research department, said he did not rule out the possibility that the index will continue to show a blue light this month, given the continued impact of SARS on the economy.

On May 16, the DGBAS cut the government's GDP growth forecast for this year to 2.89 percent from the 3.68 percent forecast made in February, reflecting the impact of the epidemic based on the assumption it can be contained by the end of next month.

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