Taiwan - Deficit decreases for 3rd year: Taiwan gov't

Taiwan's deficit for the 2012 budget has decreased by 33.1 percent to NT$114.6 billion (US$3.76 billin), the third consecutive decline, which shows the annual budget drafted by the cabinet for next year is well-planned and appropriate for the long-term development of Taiwan, Premier Wu Den-yih announced yesterday.

Also, the country's economic growth in 2011 is expected to remain modest at 4.8 percent, despite the recent debt crisis facing Europe and the United States, Wu said during a Legislative Yuan sitting yesterday to report on the proposed government budget bill for the upcoming year.

The government's annual budget for next year projects revenues of NT$1.7295 trillion and expenditures of NT$1.939 trillion, said Wu.

“The fiscal shortfall in 2012 is NT$209.5 billion. We plan to take out NT$288.5 billion in loans and make use of an annual surplus of NT$15 billion to cover the shortfall and NT$94 billion needed to amortize debt,” the premier noted.

Also, in the draft annual budget for next year, NT$407.2 billion was earmarked for social welfare, taking up the largest share of annual spending and is reportedly the largest amount the government has allocated for the area in recent history.

The second-largest portion of the budget after social welfare is educational, scientific and cultural spending, at NT$367.4 billion.

In third place is the defense budget, which grew 7.8 year-on-year to stand at NT$317.5 billion, Wu noted.

Speaking about the NT$1.7-billion decrease in the government's foreign aid budget for 2012, Wu explained that the government's resource use efficiency has been enhanced following a shift in its foreign policy.

This is demonstrated by the significant increase in the number of countries — totaling 117 — that Taiwan residents can travel to without having to apply for a visa beforehand, he said.

Taiwan's Economy to Remain Stable

Speaking about Taiwan's economic prospects, Wu said yesterday that due to the sovereign debt issues in the U.S. and European countries, Global Insight forecasts that global economic growth in 2011 will reduce to 3 percent from 4.2 percent last year.

However, this will not seriously affect Taiwan's economy, which will continue to rise on the back of increasing volumes of outsourcing by international high-tech giants and a growing demand for machinery products, Wu added.

Meanwhile, “private consumption in the country is also expected to increase on the back of improved employment,” he said.

“Our domestic economy is forecast to grow 4.8 percent and 4.6 percent in 2011 and 2012, respectively,” Wu said.

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