Overall economic monitoring indicators fell to 22 points last month, meaning overall economic signals began to flash “yellow-blue” after previously flashing “green,” further evidence of a national economic slowdown, the Council for Economic Planning and Development (CEPD) said yesterday.
The overall economic monitoring indicators fell by one point from July, when they began flashing “green” for the first time since September 2009, the council said in a report.
The “yellow-blue” signal, which indicates that the economy is gradually losing momentum after a period of steady growth, flashes when the overall economic monitoring indicators receive a score of between 17 and 22 points.
Last month’s falling score brought an end to a five-month “green” signal, which flashes when indicators score between 23 and 31 points, the report said.
“The decreasing scores indicate that Taiwan’s economy is slowing down amid the weakening global economic outlook,” Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) told a media briefing.
Among the nine components that make up the overall economic monitoring indicators, the direct and indirect financial signal surged from “yellow-blue” to “green” last month, but stock prices fell from “yellow-red” to “green,” with -customs-cleared exports dropping from “yellow-blue” to “blue,” driving down the total score for the monitoring indicators, the report’s data showed.
The leading indicator index, which is used to gauge the economic outlook for the following six-month period, also lent weight to news of an economic slowdown.
The composite leading indicator index was at 127.4 points last month, down from 127.8 points in July, the council’s statistics showed.
The index’s annualized six-month rate of change, which provides a more accurate forecast of business cycles, decreased to 0.2 percent from 1.1 percent growth a month earlier, indicating 21 months of consecutive decline, its longest decline in history, data showed.
However, Hu expects the economy to rebound next year because the debt crisis in Greece will likely be resolved by then. In addition, strong economic momentum in emerging Asian markets will bolster regional trade, further boosting Taiwan’s economic growth, 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.
The coincident index dropped 0.1 percent to 133 points from a month earlier last month, with its trend-adjusted index also falling 1.1 percent to 98.2 percent, it said.