The government’s business climate monitor last month remained “green” for the third consecutive month, indicating that the economy continues to show signs of healthy expansion, even though some barometers slowed, the National Development Council said yesterday.
The council uses a five-color system to reflect the state of the economy, with “green” indicating steady growth and “red” suggesting overheating, while “blue” signals a recession. Dual-color signals mean the economy is changing gears.
The total score for major economic bellwethers last month shed 5 points to 23 and the council dismissed the worry that the economy has lost steam, the council’s report showed.
A STABLE COURSE
Among the nine sub-indices, producer shipments, industrial output, business confidence and wholesale and retail sales lost points, but the remaining five indicators remained unchanged, it said.
“Some steelmakers closed last month to carry out annual maintenance, which weakened industrial output,” National Development Council Director Wu Ming-huei (吳明蕙) told reporters.
Purchasing activity and other indicators are staying in expansion mode, and the council has not spotted signs of an economic turnaround, Wu said.
The observation is consistent with that of the Directorate-General of Budget, Accounting and Statistics, which on Friday last week raised its growth forecast for both this year and next year due to stronger exports and consumer spending.
The nation’s export-focused economy would receive further support from an increase in global trade, Wu said.
The growing popularity of artificial intelligence and the Internet of Things might spur demand for new technology and bolster demand for semiconductors, economists have said.
Taiwan is home to the world’s largest contract chipmakers with semiconductor shipments driving 30 percent of exports.
The government has sought to bolster private investment by easing regulatory obstacles and residency requirements for foreign professionals, the council said.
The index of leading indicators, which looks ahead to the coming six months, expanded 0.26 percent to 101.58 last month, increasing for the fifth month in a row, the council said.
Of the seven components, only imports of semiconductor capital equipment and net payroll gains slipped, its monthly report indicated.
‘CAUTIOUS OPTIMISM’
“The results merit cautious optimism,” Wu said.
The council’s index of coincident indicators, which reflects the current economic status, grew 0.5 percent to 102.89, as six of the seven sub-indices posed positive cyclical movements, the report said.
Meanwhile, the lagging indicators rose 0.11 percent to 99.9 last month, it said.
Except for manufacturing inventory, the jobless rate, payrolls in industry and services, loans and investment by financial institutions, and interbank overnight rates, all indicators registered a pickup in steam, the council said.
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