The Cabinet yesterday approved a four-year national development plan from this year to 2012, which it said would boost the country’s economic growth rate to 6 percent by 2012, the level President Ma Ying-jeou (馬英九) had promised to deliver during his administration.
The proposal set a goal of an average 5 percent GDP growth rate during the four years, while the unemployment rate would be brought down to less than 3 percent by 2012, Council of Economic Planning and Development (CEPD) Vice Chairman Hu Chung-ying (胡仲英) said.
The CEPD projected the unemployment rate this year would be 4.5 percent, while GDP growth was placed at 2.5 percent, adjusted 0.38 percent up from the 2.12 percent that the Directorate General of Budget, Accounting and Statistics projected in November.
Hu told a press conference that the 0.38 percent contribution would come from a set of government measures — a NT$21.6 billion (US$650.8 million) tax reduction proposal that will be implemented when taxpayers pay income tax for last year this May; the opening up of cross-strait direct sea and air transport; and the repeated interest rate cuts since last September.
Executive Yuan Spokesman Su Jun-pin (蘇俊賓) said the 2.5 percent GDP growth rate for this year was a more optimistic prediction than in other countries, quoting Premier Liu Chao-shiuan (劉兆玄) as saying that “officials have no right to be pessimistic.”
Hu said the reason the government was confident of achieving the goals was that “the recovery will begin in the second quarter of this year.”
According to theory, in any economic cycle, it usually takes about four to six quarters to complete a contraction phase before an expansion phrase starts, Hu said.
“Given that the latest peak for the last economic cycle in the US was in December 2007, the next expansion phase should start in the second quarter of this year,” the CEPD official said.
Hu said that the government’s measures to elevate the economy — a NT$58.3 billion public construction proposal, NT$85.3 billion in consumer vouchers, the businesses bailout scheme and the interest rate cuts — were expected have a positive effect on GDP growth in the second half of the year.
Additionally, the information technology industry will see growth in its traditional peak season in the second half of this year, while increasingly warm cross-strait relations will promote economic growth, Hu said.