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Global economic crisis will delay domestic recovery: expert

2012/05/23 21:17:46

Taipei, May 23 (CNA) If the overall economic situation and the stock, export and housing markets in Taiwan shrink as the result of the global crisis, it will be dangerous for the country, the vice chairman of Taiwan-based Nan Shan Life Insurance said Wednesday.

Du Ying-tzyong said at a forum organized by his company and Business Today magazine in Taipei that although many have been expecting the economy to bounce back in 2012 from the recession that began four years ago, this will not happen until 2013-2014.

The Greek people are reluctant to support austerity measures, which adds uncertainty to that country's political future, Du said, adding that if Greece leaves the eurozone, it is the Greek people who will be the most affected.

Should the Greek debt continue to spread, the European Union will have to take vigorous action by issuing bonds and injecting more capital into other countries, he said.

In view of the slow pace of the global economy, Du said, the United States is still struggling to recover, while China's growth ranges between only 7 to 8 percent, with many countries offering low- interest rates in their efforts to deal with their problems.

In Taiwan's case, Du went on, economic recovery translates to growth of 3 to 4 percent.

From a long term perspective, Du expressed confidence in the local stock and housing markets.

Taking Singapore and Hong Kong as examples, he said that their economies were boosted by their housing markets. Their booming economies meant that people were able to afford to buy houses, he noted.

Instead of levying taxes to drag down property prices, the government should establish better traffic networks to improve quality of life and leave the market to set prices on its own, Du said.

(By Wu Chin-chun and Maia Huang)