Tue, Mar 05, 2019 - Page 11 News List

Business climate monitor returns to ‘yellow-blue’

By Crystal Hsu  /  Staff reporter

The government’s business climate monitor returned to “yellow-blue” in January as the pace of the economic slowdown eased, likely due to a front-loading effect, the National Development Council (NDC) said yesterday.

The business climate gained four points to 20, thanks to better readings on imports of capital equipment, as well as retail and restaurant sales, the council said.

“It is premature to talk about a recovery, as the improvement was likely caused by the front-loading typically seen ahead of the Lunar New Year holiday,” NDC research director Wu Ming-huei (吳明蕙) told a media briefing.

Against that backdrop, the government should remain conservative, and closely watch economic developments at home and abroad, Wu said.

In January, the sub-indices on the M1B narrow monetary measure, imports of electrical and machinery equipment, and wholesale, retail and restaurant sales gained value, while other constituents remained unchanged.

The council uses a five-color system to describe the state of the domestic economy, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors indicate a transition.

The monitor was “blue” in December last year for the first time in 33 months, raising concern that the nation’s export-reliant economy might bear the brunt of the tariff dispute between the US and China.

More than 50 percent of Taiwan’s exports are sent to the two nations.

The leading index series, which predicts the economic picture for the next six months, declined 0.56 percent to 98.69 in January, falling for the eighth consecutive month, a council report showed.

Data on export orders, stock prices, corporate confidence and floor space in new construction projects continued to show negative cyclical movements, it found.

The coincident index series, which reflects current economic trends, dropped 0.48 percent to 98.48, weakening for the 13th straight month, the report showed.

The readings on industrial production, electricity use and non-farm employment declined further from December last year, it said.

The government is to introduce new subsidies for domestic travel next month in an attempt to boost private consumption, Wu said.

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