Growth in the nation’s leading economic indicator decelerated last month, signaling that economic expansion could weaken in the next six months amid rising uncertainty about the global economy, the Council for Economic Planning and Development (CEPD) said yesterday.
The composite leading indicator index inched up 0.04 percent to 128.4 points from a month earlier, the council’s statistics showed.
The index’s annualized six-month rate of change, which provides a more accurate forecast of business cycles, dropped 0.4 percentage points to 2.1 percent, indicating a decline of 20 consecutive months.
“The slowing increase of the leading indicator reflected the slowing expansion of the global economy,” Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) told a media briefing.
The latest leading economic indices for G7 countries, the OECD and five Asian countries — China, India, Indonesia, Japan and South Korea — all decelerated.
Rising risks in the global economy also led the Directorate--General of Budget, Accounting and Statistics (DGBAS) to cut its forecast for the nation’s GDP growth this year to 4.81 percent, from 5.01 percent, earlier this month.
Compared with other global economies, Hu said Taiwan might be able to maintain its steady pace of moderate growth on the back of stable private consumption, continuing rising exports and relatively low inflationary pressure.
However, the eurozone debt crisis, rising prices for energy, agricultural and food products, and economic uncertainties in the US and China would remain the three major risks facing the global economy, Hu said.
The seven components that make up the leading economic index — average monthly overtime in industry and services, producers’ inventory for manufacturing, export orders, building permits, real monetary aggregates M1B, stock prices and the semiconductor sector’s book-to-bill ratio — all experienced a negative cyclical movement last month from the previous month, the council said in a report.
The nation’s coincident index dropped 0.2 percent to 133.5 points from a month earlier last month, with its trend-adjusted index also falling 1.2 percentage points to 100.3 percent, the report showed.
The total score of monitoring indicators dropped by one point to 24, flashing the “green” signal — which reflects steady economic sentiment — for the fifth consecutive month, the council said.
“Despite the higher-than--expected risks, we still hope the ‘green’ signal will keep flashing, at least until the end of the year,” Hu said.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
TALENT FACTOR: The nation’s chip sector would be difficult to replace, but to maintain that advantage, Taiwan must retain skilled workers, an academic said A group of experts on Sunday called on Taiwan to strive to maintain its world-leading position in the semiconductor industry, with a US-China chip dispute expected to continue regardless of who becomes the next US president. Tamkang University Graduate Institute of International Affairs and Strategic Studies director Li Da-jung (李大中) said at a Taipei seminar on global semiconductor security that the relationship between the two superpowers would remain confrontational. There appears to be “no turning back” in US-China relations, as US presidential candidates US Vice President Kamala Harris and former US president Donald Trump are both expected to continue Washington’s hawkish stance