July 23, 2020 / 4:37 AM / 18 days ago

Taiwan proposes $7 billion extra budget to stimulate economy

FILE PHOTO: Nan Shan Plaza (L) and Taiwan's landmark building Taipei 101 are pictured through the window of an airplane, in Taipei, Taiwan August 19, 2018. REUTERS/Tyrone Siu

TAIPEI (Reuters) - Taiwan proposed a second supplementary budget for 2020 worth T$210 billion ($7.13 billion) on Thursday to ease the impact of the coronavirus outbreak as the trade-reliant economy is expected to slow to a five-year low this year.

Taiwan, whose largest trading partner is China, cut its estimate for 2020 economic growth to 1.67% in May, as the pandemic hit domestic consumption and tourism.

Taiwan’s cabinet said the new extra budget, which is subject to parliamentary approval, will be used to boost sectors hit by the pandemic including fishery, tourism and aviation.

“We hope to continue to help these sectors amid the difficult time,” cabinet spokesman Evian Ting told reporters.

The government has stepped up support measures in recent months and is rolling out a stimulus package it expects will eventually be worth T$1.05 trillion. It includes issuing “stimulus coupons” that the government said could boost consumer spending by T$100 billion this year.

Academia Sinica, a government-backed academy, said this month the island’s economy could recover gradually in the second half but that the escalating U.S.-China tension was a major concern.

Taiwan has kept the pandemic well in hand with only 8 active cases and no local transmission for more than three months due to early and effective prevention work and a strong public health system.

Reporting By Yimou Lee; Editing by Ana Nicolaci da Costa

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