Taiwan will reinvest an additional T$380 billion ($12.43 billion) in tax revenue in 2023 to help protect the island from global economic shocks, including electricity price subsidies, President Tsai Ing-wen said on Saturday.

While the export-dependent economy expanded 6.45% in 2021, the fastest rate since it expanded 10.25% in 2010, it is expected to grow much more slowly in 2022 and 2023, due to COVID-19 turmoil in China, global inflation woes, and the impact of Ukraine’s war.

Tsai, in a statement from her office following a meeting of senior economic officials, said the government must make preparations in advance for the “more severe challenges” the global economy faces in 2023.

The estimated T$380 billion in excess tax revenues for the central government in 2022 will be spent on areas including subsidies for electricity prices, labour and health insurance and other spending to cope with the impact of global inflation and international economic challenges, the president said.

Government departments will also carry out a review of future industrial development strategies, “especially the adjustment of the role and layout of the semiconductor industry and the information and communications industry in the global supply chain”, Tsai said.

This will help consolidate Taiwan’s key role in the global supply chain, and maintain the sustainable momentum of industrial development and economic security and stability, she added.

Taiwan is a major producer of semiconductors, used in everything from cars and smartphones to fighter jets, and home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

Taiwan’s central bank earlier in December cut its 2022 estimate for gross domestic product (GDP) growth to 2.91% from its previous forecast of 3.51% in September.

For 2023, it projected GDP would grow 2.53%, compared with an earlier forecast of 2.9%. The economy grew 4.01% in the third quarter from a year earlier.