Despite the persistent weak economy, a rebound in exports may increase the growth momentum from this month and further boost market sentiment in the near future, the Council for Economic Planning and Development said yesterday.
The council’s remarks came after its composite monitoring economic indicators flashed a 10th straight “blue light” month last month, an indication that the nation’s economy remained in a slowdown.
The 10-month period was the second-longest “blue light” period since the nation started evaluating economic indicators in a five-color spectrum based on nine components in 1984, the council said in its monthly report. It also broke the record marked during the global financial crisis when the “blue light” flashed for nine consecutive months.
The composite monitoring economic indicators have a scale of between nine and 45, with the lowest range — nine to 16 — represented by a “blue light.” Last month’s score was 15, down one point from July, the council said.
For this month, Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a press conference that the situation might improve.
Industrial production and commercial sales are likely to gain momentum, which may provide some positive news for the economy in the near future, Hung said, citing the Ministry of Economic Affairs’ data that exports expanded more than 10 percent in the first half of this month from a year earlier.
However, the council’s index of leading indicators, which is used to gauge the short-term economic outlook, decreased 0.1 percent from a month earlier to 130.1 points last month, according to the report.
The index’s annualized six-month rate of change, which provides a more accurate forecast of the short-term business cycle, fell 0.8 percentage points to 2.9 percent last month from the previous month, marking the fourth consecutive month of decline, the report said.
Externally, the latest figures on the leading indicators of the Organisation for Economic Cooperation and Development and five Asian countries — China, India, Indonesia, Japan and South Korea -— showed declining trend for the fourth and the 19th months in a row respectively.
In related news, the consumer confidence index (CCI) showed a slight decline this month, with the index dropping 0.83 points from a month earlier to 74.35 this month, a survey showed.
However, the university’s Research Center for Taiwan Economic Development director Dachrahn Wu (吳大任) said the public’s confidence may rebound in the fourth quarter.
The CCI benchmark gauges public expectations of the stock market, household finances, durable goods, job opportunities, consumer prices and the economic outlook for the next six months.