With the commodity price index continuing to fall over the past few months and Taiwan's Central Bank of China's low-interest rate policy doing little to stimulate the interest of private investors or consumers, several academics believe that boosting public spending might be the only way to ward off deflation.
The Directorate General of Budget, Accounting and Statistics (DGBAS) under the Cabinet reported Sunday that the commodity price index in July stood at 98.8 with 1996 as the base year, indicating a drop of 0.42 percent from that of June. In the first seven months of this year, the commodity price index dropped by 0.28 percent as compared with the same period of the preceding year.
Forecasting negative growth in the consumer price index for this year, the DGBAS said that Taiwan is still facing the threat of deflation. In May the International Monetary Fund (IMF) warned that Taiwan, Germany and Hong Kong were at risk of deflation.
When faced with deflationary pressures, many countries seek to apply a loose monetary policy as a stimulus to private consumption and investment willingness, Professor Chu Hao-ming (
The professor suggested that boosting public spending might be more effective right now. However, with mounting public debt, the government must spend the money on projects that can contribute significantly to the nation, and not on quick-fix social welfare schemes.
He added that in the long run, the government needs to improve the domestic investment environment by ensuring good infrastructure, including water and electricity supplies, and making further relaxations on regulations governing cross-Taiwan Strait trade.
Chen Tien-chih (
Chen said that the worst situation would be that consumers might speculate upon further price declines as the commodity price index continues to go down. This would make it even more difficult for the economy to rebound, he added.
The scholar suggested that the government consider raising salary levels of public servants. When the private sector follows suit, commodity prices might gradually go up, as purchasing power would rise.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS