Taiwan had piled up approximately NT$6.76 trillion (US$232 billion) in public debt by the end of last year, or about 49 percent of GDP, raising concerns about the risk of a debt crisis similar to that faced by Spain and Greece.
The figure represents a 30 percent increase over four years from 2007, when the national debt amounted to NT$5.18 trillion.
Though statistics show that Taiwan’s debt ratio is lower than Spain’s 69 percent and Singapore’s 107.6 percent, it is much higher than those of export rivals South Korea and Hong Kong.
South Korea’s debt ratio stood at 34.2 percent of GDP while Hong Kong’s was 33.8 percent in the same period, according to the IMF.
“It seems that Taiwan’s debt ratio is lower than some developed countries, but it is my concern that Taiwan’s debt increase has accelerated since 2008, while the US and European countries with debt problems accumulated massive debts over several decades,” said Su Jain-rong (蘇建榮), a professor at National Taipei University’s College of Public Affairs.
According to the Ministry of Finance, the central government’s debt swelled to NT$5.77 trillion, a major part of the NT$6.76 trillion in national debt, comprising 43 percent of the nation’s gross national product in the three years ending in 2010.
The debt ratio has exceeded the 40 percent ceiling stipulated by the Public Debt Act.
Sun Keh-nan (孫克難), an assistant professor at the Department of Public Finance and Tax Administration of National Taipei College of Business, said that developed countries piled up national debts due to massive spending on public welfare, but Taiwan’s case is different.
Currently, the ministry’s debt figures do not include potential debts stemming from public insurance systems designated for manual workers, farmers, public servants and military personnel.
Taiwan’s potential national debt soared to NT$15 trillion as of the end of last year, up NT$1.97 trillion from a year earlier, according to the latest figures released by the Directorate-General of Budget, Accounting and Statistics.