Taiwan's Presidential Election Sees United Government

by Mary Swire, for LawAndTax-News.com, Hong Kong

26 March 2008

Presidential elections held in Taiwan on Saturday will see a unified government for the first time since 2000, it has been announced.

Following the defeat by the Kuomintang candidate, Ma Ying-jeou of the Democratic Progressive Party candidate, Frank Hsieh by 17 percentage points, observers have suggested that Ma may now have a fight on his hands to fulfil his pre-election promises, but have welcomed the uniting of the executive and legislative branches of government under the same political banner.

Commenting on the Presidential election results, Fitch Asia Sovereign Ratings Associate Director, Vincent Ho was quoted by the AFP as observing that:

"The combination of the legislative and presidential results could help address some of Taiwan's major rating constraints, such as tense cross-strait relations and slow reforms related to the banking system and public finances."

However, he cautioned that: "The expected increase in infrastructure investment and various tax measures, however, could have negative impacts on public finances, which remain one of the major rating constraints for Taiwan."

Despite these reservations, Fitch announced that it had revised its forecast for GDP growth up from 4.4% to a predicted 4.5% in 2008, and 5.2% next year.

The President-Elect is set to take office on May 20th.

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