The government’s business climate monitor was “green” last month for the sixth consecutive month, as major economic barometers recorded positive cyclical movements amid an improving global economy, the National Development Council said yesterday.
The nation’s export-oriented economy might continue to benefit from an increase in global trade activity this year as major international research institutes all expect the world’s economy to fare better than last year, the council said.
“A continued and stable recovery of the global economy is favorable for Taiwan’s exports,” which domestic and international institutes have forecast could emerge from a contraction last year, council director Wu Ming-huei (吳明蕙) said.
However, if Britain leaves the EU in a sour fashion and US President Donald Trump raises barriers on cross-border trade, Taiwan could take a hit, she said.
The council’s Taiwan Business Indicators last month rose two points to 28, the highest in two years, elevated mainly by more imports of electrical and machinery equipment by local firms to expand capacity and maintain technology leadership, Wu said.
The council uses a five-color system to indicate the nation’s economic status, with “green” indicating steady growth and “red” suggesting overheating, while “blue” signals a recession.
Local semiconductor firms have accelerated capital equipment purchases to tap into businesses related to the Internet of Things as Web-connected devices gain practicality and popularity.
The council’s leading series of indicators, which are used to forecast economic trends up to six months in the future, last month rose for the 10th consecutive month to 100.44, the council said.
The local share price, manufacturers’ confidence, industrial employment and the semiconductor industry’s book-to-bill ratio subindices all registered positive cyclical movement, the council said, adding that the upturns more than offset a monthly decline in building permits, export orders and monetary supply.
The concurrent index, which reflects current economic conditions, last month also increased for the 10th consecutive month to 105.53, with all seven constituent gauges gaining value, the council said.
Private consumption might remain active this month and early next month due to the Lunar New Year holiday, Wu said.
The government is drawing up measures to encourage innovation and private investment through deregulation, financial aid and tax cuts, the council said, adding that the government has several physical and digital infrastructure projects to transform Taiwan into a technology hub in the region.
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