07.26.2001
Government attempting to cover deficit

• Development: The government proposed its budget for 2002 calling for expenditures of NT$1.596tn against revenue of NT$1.347tn. This represents a 2.4% YoY contraction in revenue and a 1.3% YoY rise in expenditure, which will push the 2002 deficit up 27.0% YoY to NT$249bn.

• Analysis: Government plans to issue bonds to finance 2002 deficit and some existing debt (NT$251.4bn). Should the government issue bonds to cover its yearly deficit, this would represent 15.6% of total 2002 expenditure, exceeding the 15% statutory limit once again.

• Primasia View: The budget will be reviewed during the Legislative Yuan’s next session scheduled to convene in September.