TAIPEI: Taiwan should ride the momentum of economic recovery to boost its economic growth by increasing the pace of a NT$500 billion ($15.5 billion) economic stimulus package, said Wu Den-yih, chief of the Executive Yuan, yesterday.

Wu called for all-out efforts to implement the four-year public construction program launched by the government amid the global economic downturn, saying that the top priorities include promoting the six emerging industries and developing the service industry to speed up the transition and upgrading of Taiwan's industrial base.

He made the remarks after listening to a report by the Council for Economic Planning and Development (CEPD) on the present macroeconomic situation and economic agenda.

According to Wu, despite a relatively stable labor market, the government should continue to carry out employment promotion measures to further reduce unemployment.

It should also try to eliminate investment barriers, improve the industrial environment and pay close attention to the possible medium- and long-term impact on commodity prices caused by hikes in international oil and raw material prices, Wu said.

In light of the significant decrease in tax revenue under the sluggish economy, all government agencies should work together to retrench their expenses before the end of the year, he added.

The CEPD said predictions by international institutions indicate that the global economy is bottoming out and is expected to see a positive growth in the fourth quarter of this year, while the recovery will continue throughout next year with a 2 percent annual growth.

Taiwan should continue to promote its economic stimulus programs as planned, given that economic recovery on the island and around the world is gradual, while the stability of the global financial system has been affected by the Dubai debt crisis, the CEPD said.

According to the CEPD, careful attention should be paid to how the hikes in oil and raw material prices will impact the global economic recovery and the price of commodities, especially food.

The government should make proper use of its grain stockpile to stabilize food prices should that become necessary, it added.

Noting that Taiwan's economy is in gradual recovery, with all economic indexes moving up slightly, the CEPD said that private consumption expenditure registered positive growth for the first time in the third quarter after declining for four consecutive quarters.

Positive growth was also seen in October in industrial productivity, export orders, the wholesale and retail industries and the food service industry, it added. The economic climate flashed a green light signifying steady growth for the first time in October, with an increase in November's consumer confidence index, the CEPD said, adding that Taiwan's overall exports saw positive growth in November, even though exports to the US and Japan remained in decline.

The unemployment rate was still high, despite drops for two consecutive months, while negative growth was seen in the annual increase rate of average monthly earnings, according to the CEPD.

China Daily/CNA

(HK Edition 12/11/2009 page2)