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Economy gets `green light' for first time in 16 months

Positive April composite indicator data released yesterday shows the nation's economy has started a full-scale recovery, Vice Premier Lin Hsin-yi (林信義) said yesterday.

"The April figures suggest the economy is on its way to full-scale recovery," said Lin after the country's chief economic planning body announced the April indicator was at 26 points, up from a revised 20 points in March.

The indicator came in at a "green light" level that points to steady economic growth, according to criteria released by the Council for Economic Planning and Development (CEPD).

The April result marked the first green light since October 2000, after which the indicator moved to a "yellow blue" light for economic slowdown in November 2000.

"We should have confidence in the economy," said Lin, who also chairs the CEPD.

CEPD economic research director, Hu Chung-ying (胡仲英), told reporters: "The composite index turned to a green light in April to show steady growth in the economy, leading to the potential for a continuation of this trend in May to July, barring any major surprises.

"Given the improvement shown in April, there is a chance for the economy to stage a significant recovery in the second quarter," he said. The economy is expected to perform stronger in the third quarter than the current quarter given the anticipated onset of the peak season for the electronics industry, he said.

Among uncertainties that might affect the domestic economy are the magnitude of the recovery in the US economy, unemployment due to company lay-offs and corporate earnings prospects, Hu said.

Any possible terrorist attacks against the US and political developments in the Middle East are also among the variables that could have an impact on the economy, by affecting global crude oil prices.

The nation's drought could provide another uncertainty.

"The drought ... could weaken consumer confidence and corporate investment," Hu added.
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