Tue, May 29, 2012 - Page 12 News List

Composite indicators are ‘blue’ for the sixth month

SLUGGISH:The eurozone debt crisis and the slowdown in China have hurt exports, while anticipation of rising consumer prices is weighing on domestic consumption

By Amy Su  /  Staff reporter

The composite monitoring indicators for the economy flashed “blue” for the sixth consecutive month last month, reflecting continuing sluggish sentiment, the Council for Economic Planning and Development (CEPD) said yesterday.

The score of the composite monitoring economic indicators, which tracks nine components, was unchanged from a month earlier at 14 last month.

However, the index of leading indicators rebounded for the eighth straight month last month, providing more evidence the economy may bottom out in the second half, or might even have bottomed out in the first quarter, the council said.

The index of leading indicators, which is used to gauge near-term economic outlook, increased 0.6 percent from a month earlier to 131.4 points, the council said in its monthly report.

The index’s annualized six-month rate of change, which provides a more accurate forecast of the business cycle in the near term, climbed 0.7 percentage points to 6.6 percent last month from a month ago, marking eight months of consecutive improvement, the report indicated.

Among the seven indicators making up the trend-adjusted index, the SEMI book-to-bill ratio and stock price index improved from the previous month, with the other five indicators — building permits, real monetary aggregates M1B, index of export orders, average monthly overtime in industries and services, and the index of producer’s inventory for manufacturing — deteriorating from a month ago.

“The pace of economic recovery remains sluggish because of external and internal uncertainties,” Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a press conference.

Hung said the reigniting of the eurozone’s debt crises sparked by political instability in some European countries and the slowdown in China were two major external factors dragging down exports.

Domestically, consumers’ anticipation of rising consumer prices has climbed, further impacting on private consumption, Hung added.

However, Hung said he expected the economy to rebound moderately in the second half of the year, with annual economic growth expanding quarter-by-quarter.

The latest figures on the index of leading indicators of the Organisation for Economic Co-operation and Development and five Asian countries — China, India, Indonesia, Japan and South Korea — both showed a continuing recovery, which might provide some upside catalysts for Taiwan’s economy in the near future, the council said.

Last month’s trend-adjusted index of coincident indicators, which tracks the current pace of economic activity, decreased 0.1 percent to 95.9 points from a month earlier, while the trend-adjusted lagging index stood at 103.5 points last month, down 0.3 percent from a month ago, the report showed.

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