TAIPEI (Reuters) - Taiwan President Tsai Ing-wen said her government would not rule out additional spending next year to expand basic infrastructure work and boost domestic demand, as part of an active, fiscal policy for reviving the island economy.


The cabinet is expected to come up with an overall infrastructure construction proposal in March, Tsai said at a year-end news conference on Saturday.


"These are national, medium- to long-range programs to expand domestic demand," Tsai said. "We do not rule out the possibility of additional or special budgets to speed up the implementation."


Priority will be given to construction, such as train and subways systems, and broadband networks, that connects cities and regions islandwide and also puts basic infrastructure investment into less developed areas, in a bid to even out growth, she said.


Local governments have been seeking ways to sustain growth as the national economy, highly dependent on foreign trade and trade with China, slows amid global uncertainties and a political impasse between Taipei and Beijing.


Taiwan's central bank chief Perng Fai-nan has called for more structural policies to keep growth on track and earlier this month, the central bank held its policy rate steady, saying that growth prospects will improve next year but warned a rise in trade protectionism could hobble the export-reliant economy.

The government expects the economy to grow 1.35 percent for 2016, and has estimated a faster 1.87 percent expansion for 2017.

(Fixes typo in first paragraph)

(Reporting by J.R. Wu; Editing by Michael Perry)