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A report from Bank of America (BofA) highlighted a growing focus on Taiwan’s fiscal policy among international investors. The discussions revolve around the island’s unique financial situation characterized by robust revenue streams contrasted with a constricted budget.
This fiscal paradox has led the Taiwanese government to increasingly rely on special budgets, as evidenced by the recent unveiling of a NT$410 billion relief package, which equates to 1.6% of the nation’s Gross Domestic Product (GDP).
The analysis by BofA points out that while the Taiwanese cabinet has approved a relief package, the potential for large-scale economic stimulus remains limited unless the situation with tariffs intensifies. This cautionary stance reflects a measured approach to fiscal expansion in light of current economic conditions.
Regarding the energy sector, BofA projects that power tariffs in Taiwan are expected to hold steady in 2025, supported by subsidies and a decline in energy prices. However, the firm anticipates that from 2026 onwards, there will be incremental increases in power prices.
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