The nation’s composite economic indicators last month flashed a “yellow-blue” signal for the seventh consecutive time, the longest sequence on record, indicating that momentum for recovery is still weak, the Council for Economic Planning and Development (CEPD) said yesterday.
The council uses a five-color spectrum to gauge domestic economic health, with “blue” signaling recession; “yellow-blue” a slowdown; “green” steady growth; “yellow-red” a slight overheating; and “red” overheating.
The score of composite indicators — which take into account both leading and coincident indicators — reached 18 last month, down two points from February, because of declining industrial production, the council said in a report.
The index of leading economic indicators, which is used to gauge the short-term economic outlook, rose 0.4 percent last month from a month earlier to 135.3 points, the council’s monthly report showed.
However, the index’s annualized six-month rate of change, which provides a more accurate forecast of the business cycle in the near term, declined 0.2 percentage points to 6.3 percent last month from a month ago.
The first decline since July last year was caused by rising inventories at manufacturers, the report said.
The index of coincident indicators, which reflects monthly economic conditions, declined 0.6 percent to 97.6 points last month, the largest decline since September last year, because of declining shipments in the manufacturing sector and lower industrial production, the report showed.
“From economic indicators in Taiwan and elsewhere we continue seeing both positive and negative signs, which means the future is still uncertain and an immediate recovery is not likely,” Hung Jui-bin (洪瑞彬), director-general of the council’s economic research department, told a press conference.
However, Hung said that more overseas Taiwanese businesses plan to increase investment in their home market, which would help the economy.
Citing information provided by the Ministry of Economic Affairs, Hung said that as of April 10, the government had received 29 applications for NT$176.3 billion (US$5.95 billion) in investment projects. These projects are expected to create 27,000 jobs, he said.
Furthermore, Hung said Global Insight, an international economic think tank, had forecast that global economic growth would rise from quarter to quarter this year, and Taiwan would benefit.
According to Global Insight, the world’s economic year-on-year growth will be 2.2 percent, 2.4 percent, 2.6 percent and 3.1 percent in each quarter this year, Hung said.