Fri, Mar 28, 2014 - Page 14 News List

Economic index flashes green: NDC

EXPORT EFFECT:Exports grew 7.3 percent last month, driving knock-on rises in manufacturing and industrial production, the National Development Council said

By Camaron Kao  /  Staff reporter

The National Development Council’s (NDC) index of economic monitoring indicators flashed “green” last month after showing “yellow-blue” a month ago, as the nation’s economy improves on the back of strong export growth, the council said.

Exports grew 7.3 percent last month from a year earlier, higher than the 1.7 percent annual increase seen in January, it said.

Because of higher export growth, industrial production and manufacturing sales also registered higher year-on-year increases last month compared with the previous month, making the index of monitoring indicators rise three points to 25, from January, Council Chief Secretary Kao Shien-quey (高仙桂) told a press conference yesterday.

Last month’s score of the monitoring indicators — which takes into account both leading and coincident indicators — was at its highest since July 2011, the council said.

SPECTRUM

The council uses a five-color spectrum to categorize the nation’s economic health, with “blue” signaling recession, “green” steady growth and “red” overheating, while “yellow-blue” indicates a transition between recession and growth, and “yellow-red” represents a transition between growth and overheating.

According to Kao, exports to developed countries rose more significantly than those to emerging markets, as demand among the latter was affected by the tapering of the US’ quantitative easing policy.

As a result, ongoing tapering of quantitative easing and the economic slowdown in China are expected to remain risks for the nation’s economy this year, she said.

US, CHINA ADJUSTMENTS

“During the global financial crisis, China increased its money supply and the US issued large loans to companies so that they could remain solvent, and now both countries have to make necessary adjustments, which is why the economic recovery is only tepid,” she said.

However, the council is still cautiously optimistic that the index of economic monitoring indicators will flash “green” this month, Kao said.

The index of leading economic indicators, which is used to gauge the nation’s short-term economic outlook, posted its 18th consecutive increase — to 101.35 points, up 0.19 percent from 101.16 points a month ago, according to the council.

The index of coincident indicators, which reflects monthly economic conditions, reported its tenth consecutive rise — to 101 points, up 0.3 percent from 100.7 points a month earlier, the council added.

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