The latest index of leading indicators showed economic expansion would continue slowing for the next six months, the Council for Economic Planning and Development (CEPD) said yesterday, noting that the indicator’s annualized six-month rate of change turned negative last month.
The composite leading indicator index, which is used to gauge the economic outlook for the next six-month period, stood at 126.8 points, down by 0.39 percent from a month earlier, the council said.
All seven components in the index experienced a negative cyclical movement last month from August, the council said in a report.
The index’s annualized six-month rate of change, which provides a more accurate forecast of the business cycle in the near future, slipped 0.9 percent to minus 0.7 points last month, the first time it has turned negative since April 2009.
That also represented 22 months of consecutive decline, making it the longest decline ever, the report said.
“The latest data showed that Taiwan’s economy may keep slowing for the next six months,” Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) told a press conference.
Although domestic demand remained stable, the slowing global economy has influenced the nation’s export growth, Hu said.
The latest leading indicator index for global countries confirmed the weakening economic sentiment, with that of the Organisation for Economic Co-operation and Development countries dropping for the sixth consecutive month and that of the five Asian countries — China, India, Indonesia, Japan and South Korea — declining for seven straight months, the council said.
However, Hu reiterated there would not be another global recession.
Domestic demand on the emerging markets and China’s improving economy would help hold up the global economy and the eurozone’s debt crisis would eventually be resolved, he said.
Also, the government has prepared a series of short-term stimulus plans regarding exports, domestic demand, employment, consumer prices and finances, Hu said, although he refused to outline them in detail.
Taiwan’s coincident index dropped 0.7 percent to 130.3 points from the previous month, with its trend-adjusted index decreasing by 1.7 percent to 96.1, statistics showed.
The total score of monitoring indicators increased a point to 21, flashing the “yellow-blue” signal for the second consecutive month.
Among the nine components, the stock price index dropped a point, with non-agricultural employment and manufacturing sales gaining a point each, the council’s data showed.
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