Since 2017, the central government has achieved surpluses for six consecutive years. In 2022, the surplus reached NT$499.3 billion. Although the budget has been expanded in order to meet the government expenditure requirements in 2023 resulting in a deficit of NT$109.5 billion, efforts will be made to narrow this deficit during the actual execution.
The ratio of outstanding debt with a maturity of one year or more incurred by the Central Government to the average of nominal GDP for the previous three years (referred to as the debt-to-GDP ratio) decreased from 33.0% in 2016 to 29.6% in 2019. The ratio then further dropped to 29.3% in 2022. According to the budget figures, the estimated debt-to-GDP ratio for 2023 is 30.7%, which is 9.9% below the debt ceiling of 40.6%, indicating fiscal resilience. As of the end of July 2023, the actual debt-to-GDP ratio stands at 27.2%, demonstrating proactive debt growth management by the central government.
During President Tsai's tenure, in order to accelerate the advancement of national infrastructure, respond to the COVID-19 pandemic, and safeguard national security, various special budgets were drawn, leading to a short-term expansion of the deficit. However, thanks to consecutive surpluses from the general budget and the ongoing effectiveness of promoting cost-cutting and source-broadening measures, our debt has been prudently managed. From 2018 to 2022, a total of NT$522.7 billion in debt was repaid. Additionally, the originally allocated borrowing budget of NT$482.5 billion remained entirely unused, effectively mitigating debt growth.
In response to recent public attention regarding central government debt, the Ministry of Finance will establish a debt promotion area on our official website, allowing the public to review and gain a deeper understanding of our debt condition. In 2021 and 2022, three major international credit rating agencies, namely Fitch, Moody's, and Standard & Poor's, upgraded our country's credit ratings or provided positive assessments. According to the "2023 World Competitiveness Yearbook" published by the International Institute for Management Development (IMD), our country's "fiscal situation" advanced by 4 places to reach the 6th position. This improvement reflects the government's continuous reduction of borrowing and increased debt repayment, contributing to sound fiscal management.
In the future, while carrying out government expenditures, the MOF will coordinate with the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan to continue implementing cost-cutting and source-broadening measures. Concurrently, the MOF will also increase the debt repayment based on revenue execution, thereby slowing down the accumulation of debt. Through these actions, we aim to balance the government policy needs with economic development, thus strengthening fiscal capabilities.
Contact Person: Director Wang, Shu-Yi
Contact number: +886-2-2322-8068