TAIPEI (Reuters) – Taiwan hopes not to have to spend more than $35 billion on protecting its economy from the impact of a coronavirus pandemic, but it’s “hard to say for sure” as it spreads globally, Premier Su Tseng-chang said on Thursday.
Taiwan has reported 339 infections and five deaths, winning plaudits for early and effective measures against the virus, but its export-reliant economy has wilted as the disease has spread through Europe and the United States.
The island expects to spend a total of T$1.05 trillion ($34.72 billion) in stimulus measures being rolled out, President Tsai Ing-wen said on Wednesday.
At the time of the first discussions over economic stimulus, the virus was mostly affecting China, but now, with its global impact, Taiwan needed to spend the T$1.05 trillion, Su told reporters, or the equivalent of about 5% of GDP.
“But will it be that?” he asked. “We hope so. We hope not to have to increase it.”
He added, “However, it’s hard to say for sure, as the epidemic is still developing.”
The next phase of the stimulus package will be a special budget of T$150 billion for parliament to approve.
Last month, the central bank cut its full-year growth outlook to 1.92% from a December forecast of 2.57%, though some banks expect the economy to shrink in 2020.
It also cut interest rates for the first time in more than four years to a new low of 1.125%, and said it would provide banks with financing of T$200 billion to support companies battling the virus fallout.
On Monday, central bank governor Yang Chin-long said there was room for more interest rate cuts, but they would not be reduced to zero or negative territory, and the government would offer more funds for small- and medium-sized companies if needed.
(Reporting by Ben Blanchard; Editing by Clarence Fernandez)