Taiwan government will show resolve on economy

Abstract

Subject Economic policy in Taiwan. Significance The government earlier this month announced an eight-year special budget for infrastructure worth 880 billion Taiwan dollars (29 billion US dollars). It is part of an economic plan in February that aims to boost GDP growth over the next four years, signalling a push to address livelihood issues by the government of President Tsai Ing-wen, whose public support has evaporated since she took office last May. The plan's announcement follows closely on the heels of the introduction of a five-day work week in January. The controversial amendment to the labour law shortening the work week indicates a new willingness by the Tsai administration to weather public discontent in pressing forward with its economic agenda. Impacts GDP growth will get a fiscal boost, but the targeted 2.5-3.0% may still prove too ambitious. The labour reform will create inflationary pressure. Taiwan's export dependence means that domestic policies can only go so far; external demand will be crucial.