The government’s business monitoring system slipped to the “blue” zone last month, affirming that the nation’s export-reliant economy is weakening, with the pace of the slowdown likely to worsen in the current quarter, the National Development Council (NDC) said yesterday.
“Blue” indicates a listless economic state. The council’s announcement is the first time the blue rating has been employed since September 2012 and comes less than a week after the Directorate-General of Budget, Accounting and Statistics lowered its forecast for GDP growth this year.
“The data are worrying, as the impact of poor exports diffused,” council researcher Wu Ming-hui (吳明蕙) said by telephone.
Photo: CNA
The slowdown has chances of easing in the second half when global economy may see stronger momentum and translate into stronger demand for electronic exports, Wu said.
However, there does not appear to be a strong growth driver on the horizon, such as Apple Inc’s iPhone 6 last year, she said.
It remains to be seen whether wearables, such as the Apple Watch, can make a big splash and as well as business opportunities linked to the Internet of Things, Wu said.
The overall score for the business gauges dropped six points to 16 last month, with all but one indicator displaying downward cyclical movements, the council’s report said.
The leading index, which forecasts economic conditions three to six months ahead, stood at 97.74 last month, a drop of 0.58 percent, down for the 12th straight month, the report said.
The decline is widening, as more manufacturers are cautious about their business prospects, Wu said.
Of the leading subindices, only the semiconductor book-to-bill ratio and share price, as well as money supply readings, stayed in expansion mode, while building permits, export orders and other barometers registered negative moves, the report said.
Exports, which drove 70 percent of GDP growth last quarter, may start to show signs of stabilization next quarter with the advent of the high season for technology products, Wu said, adding that she is not totally confident, given the technology cycle’s volatile nature.
A “blue” light for one month raises alarm, but could prove harmless if the warning lifts in the following months, Wu said.
The DGBAS last week forecast that the contraction in exports may deteriorate to 6.95 percent this quarter, from 4.18 percent last quarter, reducing the chance of rebound any time soon.
The coincident index, which reflects current economic conditions, pared 0.55 percent to 99.29 last month, weighed by disappointing custom-cleared exports, as well as trade and food services, the council report said.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft