Taiwan's economic growth continued to lose steam last month as the index of leading indicators slid for the fifth month straight but government officials remained bullish in their economic outlook for the year.
According to a report released yesterday by the Council for Economic Planning and Development (CEPD), the index of leading indicators slipped by 1.3 percent from January's revised 108.5 to 107.1 last month.
The index is composed of seven components and designed to gauge economic activity for the next three to six months.
Falling
The CEPD contributed the drop to a fall in its five components -- the wholesale price index, the growth of the M1B money supply, a change in the stock market index, the growth of new orders by manufacturers, and the value of exports clearing customs -- compared with the figures in January.
The other two components -- working hours in the manufacturing sector and the approval of property construction -- showed positive variations.
The index of coincident indicators, which measure the pace of economic activity, slightly decreased by 0.1 percent from January, according to the report.
Another important factor for gauging economic momentum, the total score of monitored indicators, remained unchanged at 23 points last month, the lowest level to flash a "green light" pointing to steady growth of the economy.
The CEPD uses a five-level spectrum to measure domestic economic health, with blue indicating recession, yellow-blue a slowdown, green steady growth, yellow-red a slight overheating and red a serious overheating.
Addressing a press conference yesterday, Chen Pao-jui (陳寶瑞), deputy director general of the council's economic research department, refused to predict whether the economy will receive a "yellow-blue" light in the near future.
Citing annual forecasts provided by major economic institutions, Chen said the economic growth rate would remain above 4 percent although the Directorate General of Budget, Accounting and Statistics has revised down this year's growth rate from 4.56 percent to 4.21 percent.
"Strong private investment and consumption are the two main driving forces behind this momentum," Chen said, adding that rising export orders and the rosy international economic outlook will support domestic growth.
Different situation
Although escalating international oil prices and rising interest rates have casted doubts on future development, Chen said the situation is different from that in 2001 when countries around the world suffered from recession, led by the US.
Taiwan faced an unprecedented minus 2.22 percent growth rate in 2001.
Looking ahead, most domestic manufacturers are optimistic about the economic climate in the next three months, with 22 percent of the companies interviewed saying the economy will turn for the better. Sixty-eight percent, up from 64 percent polled in January, adopted a neutral viewpoint while the remaining 10 percent, down from 14 percent the previous month, expressed pessimism.
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