Growth in the nation’s leading economic indicator decelerated last month, signaling that economic expansion could weaken in the next six months amid rising uncertainty about the global economy, the Council for Economic Planning and Development (CEPD) said yesterday.
The composite leading indicator index inched up 0.04 percent to 128.4 points from a month earlier, the council’s statistics showed.
The index’s annualized six-month rate of change, which provides a more accurate forecast of business cycles, dropped 0.4 percentage points to 2.1 percent, indicating a decline of 20 consecutive months.
“The slowing increase of the leading indicator reflected the slowing expansion of the global economy,” Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) told a media briefing.
The latest leading economic indices for G7 countries, the OECD and five Asian countries — China, India, Indonesia, Japan and South Korea — all decelerated.
Rising risks in the global economy also led the Directorate--General of Budget, Accounting and Statistics (DGBAS) to cut its forecast for the nation’s GDP growth this year to 4.81 percent, from 5.01 percent, earlier this month.
Compared with other global economies, Hu said Taiwan might be able to maintain its steady pace of moderate growth on the back of stable private consumption, continuing rising exports and relatively low inflationary pressure.
However, the eurozone debt crisis, rising prices for energy, agricultural and food products, and economic uncertainties in the US and China would remain the three major risks facing the global economy, Hu said.
The seven components that make up the leading economic index — average monthly overtime in industry and services, producers’ inventory for manufacturing, export orders, building permits, real monetary aggregates M1B, stock prices and the semiconductor sector’s book-to-bill ratio — all experienced a negative cyclical movement last month from the previous month, the council said in a report.
The nation’s coincident index dropped 0.2 percent to 133.5 points from a month earlier last month, with its trend-adjusted index also falling 1.2 percentage points to 100.3 percent, the report showed.
The total score of monitoring indicators dropped by one point to 24, flashing the “green” signal — which reflects steady economic sentiment — for the fifth consecutive month, the council said.
“Despite the higher-than--expected risks, we still hope the ‘green’ signal will keep flashing, at least until the end of the year,” Hu said.