Wed, Nov 28, 2007 - Page 12 News List

CEPD is 'cautiously optimistic' about economic prospects

By Joyce Huang  /  STAFF REPORTER

The local economy continued to strengthen last month after government monitoring indicators signaled a "yellow-red light" for two consecutive months, the Council for Economic Planning and Development said yesterday.

"The nation's economic fundamentals were solid [last month] and better than people believe," said Hung Jui-bin (洪瑞彬), director-general at the council's economic research department.

Hung, citing stabilizing consumer prices and robust export growth, said the council was "cautiously optimistic" about economic prospects for the next two months despite rising fuel costs and slacking economic confidence.

The total score of monitoring indicators for last month was 32 points, up from 30 points in July and August, indicating a mild overheating in the economy, said Wu Ming-huei (吳明蕙), senior specialist at the council's economic research department.

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

The council's leading indicators for last month climbed to 149.2 points -- a 5.5 percent annualized six-month growth -- from 147.8 points in September.

Five of the seven elements that make up the indicators rose last month, including indexes of manufacturers' inventory, stock prices, semiconductors' book-to-bill ratio, averaged monthly overtime hours and building permits, Wu said.

The council's coincident indicators, which follow the pace of economic activity, rose 0.5 percent month-on-month to 152.3 points last month, after posting a 1.2 percent decline in June, the council said.

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