Sat, Dec 28, 2013 - Page 13 News List

Economy still in transition: council

DRAWN-OUT AFFAIR:Council of Economic Planning and Development data showed that the nation has been stuck between recession and growth for five straight months

By Camaron Kao  /  Staff reporter

The nation’s economic monitoring indicators flashed “yellow-blue” for the fifth month last month, meaning the economy is still in a transition period between recession and growth, the Council for Economic Planning and Development (CEPD) said yesterday.

The score of indicators — which takes into account both leading and coincident indicators — rose 1 point to 21 points from a month ago, according to the council.

“The stock market in Taiwan was very active last month, but the nation’s exports, [industrial] production and [private] consumption were still slow,” council chief secretary Kao Shien-quey (高仙桂) said.

The council uses a five-color spectrum to gauge economic health, with “blue” signaling recession, “green” steady growth and “red” overheating, with “yellow-blue” indicating a transition between recession and growth, and “yellow-red” a transition between growth and overheating.

The lackluster economy was also reflected by the slight monthly increase in the index of coincident indicators last month, Kao said. The index, which reflects monthly economic conditions, rose 0.07 percent to 99.24 points last month from a month earlier, the council said.

The index of leading economic indicators, which is used to gauge the nation’s short-term economic outlook, posted its 15th consecutive increase to 101.2 points last month, up 0.19 percent from October, the council said, adding that the increase was also mild.

“The global economy has remained weak over the past two years, and although economies in developed countries rebounded this year, economies among Asian countries did not improve,” Kao said.

However, leading and coincident indicators may show significant increases next year because of growing signs last month pointing to an improving global economy, Kao said.

The latest statistics showed that economic growth in the US in the third quarter reached 4.1 percent, and its jobless rate dropped to 7 percent last month, while the economy in Europe is expected to come out of recession and post a 0.8 percent growth next year, according to Kao.

Leading indicators for five major Asian countries reported the third consecutive increase to 99.4 points last month, up 0.08 percent from a month earlier, the council said, adding that Taiwan’s exports in petrochemical, steel and machine industries will benefit from any future economic growth in Asia.

“The monitoring indicators are likely to flash ‘green’ in the first half of next year, provided that the nation’s exports increase significantly next year as the global economy grows,” Kao said.

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