The COVID-19 pandemic might weigh on the nation’s economy through the second quarter and erase up to 1.4 percentage points from GDP growth this year in the worst-case scenario, National Development Council Minister Chen Mei-ling (陳美伶) said yesterday.
The government would seek to retain GDP growth of more than 2 percent by introducing relief funds and stimulus measures that could be stepped up if necessary, she said.
“The virus outbreak might affect the economy for six months,” twice as long as previously expected, as it has spread to Europe and the US, Chen told a meeting of the Legislative Yuan’s Economics Committee in Taipei.
Photo: Chien Jung-fong, Taipei Times
Disruptions caused by the coronavirus on global economic activity would dent Taiwan’s GDP growth by 0.66 percentage points this year, if the world can contain the disease by June, she said.
A protracted outbreak could reduce GDP growth by 1.4 percentage points in the worst-case scenario, in which tourist arrivals would continue to dwindle and export orders dry up, she added.
The bleak projection does not take into account benefits to be generated from a stimulus package and potential increases in domestic tourism as global restrictions limit outbound travel, Chen said.
There is still a chance for the economy to grow 2 percent if all government agencies work hard to ensure that relief funds reach their intended recipients and public works budgets are effectively implemented, she said.
“That is the government’s goal. We cannot afford to be optimistic, but there is no time for pessimism,” Chen said.
Major economic gauges look healthy so far, Chen said, adding that the government’s business climate monitor for last month would not disappoint given the mild outbreak in Taiwan.
The council is scheduled to release the data this afternoon.
However, lockdowns in Europe and several US states pose a bigger threat to economic activity than concerns over supply-chain disruptions in China, which have subsided along with the number of new infections in that nation, Chen said.
The government would evaluate the global fight against COVID-19 and would strengthen its aid program if needed, she said.
Despite heightened downside risks, the coronavirus has lent support to e-commerce and the digital economy, she added.
Taiwan can take advantage of the opportunity to transform its economy, facilitating the development of 5G and artificial-intelligence applications, Chen said.
Taiwanese firms command global leadership in chip manufacturing and design, as well as other technologies, she said.
CROSS-STRAIT COLLABORATION: The new KMT chairwoman expressed interest in meeting the Chinese president from the start, but she’ll have to pay to get in Beijing allegedly agreed to let Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) meet with Chinese President Xi Jinping (習近平) around the Lunar New Year holiday next year on three conditions, including that the KMT block Taiwan’s arms purchases, a source said yesterday. Cheng has expressed interest in meeting Xi since she won the KMT’s chairmanship election in October. A source, speaking on condition of anonymity, said a consensus on a meeting was allegedly reached after two KMT vice chairmen visited China’s Taiwan Affairs Office Director Song Tao (宋濤) in China last month. Beijing allegedly gave the KMT three conditions it had to
STAYING ALERT: China this week deployed its largest maritime show of force to date in the region, prompting concern in Taipei and Tokyo, which Beijing has brushed off Deterring conflict over Taiwan is a priority, the White House said in its National Security Strategy published yesterday, which also called on Japan and South Korea to increase their defense spending to help protect the first island chain. Taiwan is strategically positioned between Northeast and Southeast Asia, and provides direct access to the second island chain, with one-third of global shipping passing through the South China Sea, the report said. Given the implications for the US economy, along with Taiwan’s dominance in semiconductors, “deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority,” it said. However, the strategy also reiterated
‘BALANCE OF POWER’: Hegseth said that the US did not want to ‘strangle’ China, but to ensure that none of Washington’s allies would be vulnerable to military aggression Washington has no intention of changing the “status quo” in the Taiwan Strait, US Secretary of Defense Pete Hegseth said on Saturday, adding that one of the US military’s main priorities is to deter China “through strength, not through confrontation.” Speaking at the annual Reagan National Defense Forum in Simi Valley, California, Hegseth outlined the US Department of Defense’s priorities under US President Donald Trump. “First, defending the US homeland and our hemisphere. Second, deterring China through strength, not confrontation. Third, increased burden sharing for us, allies and partners. And fourth, supercharging the US defense industrial base,” he said. US-China relations under
The Chien Feng IV (勁蜂, Mighty Hornet) loitering munition is on track to enter flight tests next month in connection with potential adoption by Taiwanese and US armed forces, a government source said yesterday. The kamikaze drone, which boasts a range of 1,000km, debuted at the Taipei Aerospace and Defense Technology Exhibition in September, the official said on condition of anonymity. The Chungshan Institute of Science and Technology and US-based Kratos Defense jointly developed the platform by leveraging the engine and airframe of the latter’s MQM-178 Firejet target drone, they said. The uncrewed aerial vehicle is designed to utilize an artificial intelligence computer
RSS