Taiwan mulling shopping scheme to boost consumption: report
November 16, 2008
Taiwan plans to launch a multi-billion-dollar shopping coupon programme to stimulate domestic consumption amid the global economic crisis, it was reported Sunday.
The programme, based on a similar initiative launched by Japan in 1999, may cost the government up to 70 billion Taiwan dollars (2.12 billion US), the Taipei-based Commercial Times said.
The programme was discussed when Premier Liu Chao-shiuan met cabinet members over the weekend to draft measures aimed at boosting the economy and staving off recession, it said.
According to the draft proposal presented by the Council for Economic Planning and Development, the island's top economic planning body, around 6.7 million families would be given shopping coupons worth 10,000 Taiwan dollars to spend on goods ranging from food to clothing and electronic appliances.
The wealthiest 12 percent of families may be excluded from the scheme, which has yet to be finalised, the Commercial Times said.
Taiwan's economy continued to show signs of slowing in September with the index of leading indicators for the month falling 0.3 percent from August, the government said.
Taiwan's October exports, the engine of the economy, fell 8.3 percent from a year earlier, largely on falling demand for electronic and precision products amid a global economic slump.
The figures, together with an updated IMF forecast, prompted Taiwan's central bank to further lower interest rates by 25 basis points last week -- the fourth cut in just over a month.
The International Monetary Fund earlier this month predicted that advanced economies -- major export markets of Taiwan -- would shrink next year under pressure from the global credit squeeze, forcing a new round of European interest rate cuts.
The government has lowered its economic growth forecast for 2008 to 4.30 percent from 4.78 percent, but an increasing number of economists and analysts regard the revision as too optimistic given the current economic turmoil.