The nation’s economic monitoring indicators flashed “yellow-blue,” for the fourth straight month last month, indicating that the economy continued to lose momentum, the Council for Economic Planning and Development (CEPD) said yesterday.
The total score of the monitoring indicators dropped two points from October to stand at 17 last month, the council said in a report. The score was only one point away from the “blue” light, which represents economic depression.
Meanwhile, the trend in leading indicators also showed the longest downturn in their history.
The composite index of leading indicators, a gauge of the economic outlook in the next six months, stood at 126.8 points last month, down 0.01 percent from October, the council said.
The index’s annualized six-month rate of change, which provides a more accurate forecast of the business cycle in the near term, slipped 0.1 points to minus 0.5 points last month, representing 24 months of consecutive falls, the lengthiest decline ever.
The report also showed weakening coincident indicators, with the composite index sliding 0.5 percent to 128.4 points last month from October’s 129.1, while the trend-adjusted index decreased 1.4 percent to 94.8.
Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) attributed the slowing growth momentum to the weak global economy, in particular the eurozone debt crisis, weak growth in the US, China’s potential hard landing, as well as the risks associated with rising food and raw -material prices.
Internally, the upcoming presidential election on Jan. 14 would be another uncertainty for the economy, Hu said.
“If the eurozone’s debt problem does not deteriorate and Taiwan’s ruling party maintains power after the election next year, the nation’s economy may bottom out the first quarter next year,” he said.
Minister of Economic Affairs Shih Yen-shiang (施顏祥) said earlier yesterday that the economy is likely to hit bottom in the first quarter next year and begin to rise in the following three months.
Separately, the consumer confidence index (CCI) fell for the fourth consecutive month to 77.58 points this month, from 79.88 points last month, marking its lowest level since May last year, a National Central University survey showed yesterday.
The CCI benchmark gauges public expectations regarding the performance of the stock market, household finances, durable goods, job opportunities, consumer prices and the economic outlook for the next six months.
This month’s survey — which polled 2,420 people over the age of 20 between Monday and Thursday last week — showed consumers’ confidence toward the stock market showing the steepest drop of all the sub-indices, the university’s Research Center for Taiwan Economic Development said in a report.
“The volatile stock market was the main factor leading the index’s fall this month, indicating that consumer confidence toward the sector has almost fallen to the level it was during the global financial crisis between 2008 and 2009,” center director Dachrahn Wu (吳大任) said by telephone.
The stock investment sub-index slid to 52.9 points this month from 59.1 last month, its lowest level since March 2009, the monthly survey showed.
As for the other five sub--indices, consumer confidence on job opportunities and consumer prices improved this month, while uncertainty regarding the other three sectors increased, data showed.