The nation’s leading economic indicator continued its uptrend last month, but rising concerns over the US economy may bring higher risks to Taiwan’s economy, the Council for Economic Planning and Development said yesterday.
The leading indicator index, which is used to gauge the economic outlook for the upcoming six-month period, rose 0.3 percent to 128.9 points last month from the previous month, according to the council’s statistics.
The index’s annualized six-month rate of change, which provides a more accurate forecast of business cycles, surged 3.87 percent last month, ending 17 months of consecutive decline, evidence that the nation’s economic expansion remains stable, data showed.
“The increasing leading indicator showed that the nation’s economic expansion is continuing on a stable path, but compared with consumer prices, Taiwan’s current economy is more likely to be influenced by the recent US economic problems,” Council for Economic Planning and Development Deputy Minister Hu Chung-ying (胡仲英) told a media briefing.
The continuing high unemployment rate in the US, its national debt crisis and the dilemma of whether to maintain its quantitative easing measures all increased uncertainties in Taiwan’s economy amid the high level of trade dependence on the US, Hu said.
By comparison, inflationary pressures and the eurozone’s debt crisis would not influence Taiwan’s economy that much, he added.
The latest leading indicator indices for the G7 countries, the Organisation for Economic Co--operation and Development (OECD) and five Asian countries (Japan, China, South Korea, India and Indonesia) all dropped from a month earlier, providing more evidence of uncertainties in the global economy, the council said.
Of the seven components comprising the leading index, only the SEMI book-to-bill ratio experienced cyclical movement last month, while the other six moved down, the report said.
The other six components include average monthly overtime in industry and services, producers’ inventory for manufacturing, export orders, real monetary aggregates, M1B, building permits and stock prices, data showed.
The coincident index rose 0.5 percent to 136.7 points from a month earlier last month, with its trend-adjusted index increasing 0.6 percent to 102.6, the report showed.
The total score of monitoring indicators dropped by one point to 28, flashing the “green” signal for the third consecutive month, with customs-cleared exports — one of its nine components — losing three points and changing its individual light signal from “yellow-red” to “blue” on the rising New Taiwan dollar against the greenback from the previous year and the high comparison base last year, data showed.
Hu said the nation’s monitoring indicators would keep flashing the “green” signal at least until the end of this year, as economic expansion should remain at the current stable pace.