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Indicators point to slight overheating last month

The nation's economy remained slightly overheated last month despite a sustained decline in momentum, the Council for Economic Planning and Development said yesterday.

The index of leading indicators, used to gauge domestic economic activity, stood at 107.6 points last month, down 0.8 percent from July, said the council, Taiwan's highest official economic planning body.

The total score of monitored indicators dropped to 33 points last month from 35 in July, to signal a third consecutive "yellow-red light," indicating a slight overheating of the economy, the council said. In May, the indicators flashed the first "red" light reading since December 1994.

The main index -- comprising seven indicators including wholesale prices and export orders received by the manufacturing industry -- are designed to measure Taiwan's economic activity three months ahead.

The council uses a five-level spectrum to gauge domestic economic health, with blue indicating recession, yellow-blue a slowdown, green steady growth, yellow-red a slight overheating and red an absolute overheating.
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