Taipei: To help shield the island from global economic shocks, Taiwan will reinvest an additional T$380 billion ($12.43 billion) in tax revenue in the economy in 2023, including subsidies for electricity prices, President Tsai Ing-wen said on Saturday.

While the export-dependent economy expanded at a 6.45% annual rate in 2021, the fastest rate since it increased by 10.25% in 2010, growth is anticipated to be much slower in 2022 and 2023 due to the effects of the war in Ukraine, COVID-19 turmoil in China, and global inflation woes.

Tsai said in a statement released by her office after a meeting of senior economic officials that the government must get ready now for the "more severe challenges" the world economy will face in 2023.

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The president stated that the estimated T$380 billion in additional tax revenues for the central government in 2022 will be used for things like electricity price subsidies, labour and health insurance, and other expenditures to deal with the effects of global inflation and international economic challenges.

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Future industrial development strategies will also be reviewed by government agencies, "particularly the adjustment of the role and layout of the semiconductor industry and the information and communications industry in the global supply chain," according to Tsai.

This will maintain the sustainable momentum of industrial development and economic security and stability, she added, as well as strengthen Taiwan's significant position in the global supply chain.

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Taiwan is a major producer of semiconductors, which are used in a variety of products, including fighter jets, cars, and smartphones. Taiwan Semiconductor Manufacturing Co Ltd. is the largest contract chipmaker in the world (TSMC).

Taiwan's central bank earlier in December reduced its projection for 2022 GDP growth from its previous forecast of 3.51% in September to 2.91%.

Compared to an earlier prediction of 2.9%, it predicted that the GDP would increase by 2.53% in 2023. In the third quarter compared to a year earlier, the economy expanded by 4.01%.