The government’s business climate monitor last month again flashed “yellow-blue,” as the nation’s economic activity remained beleaguered by the effects of the COVID-19 pandemic, the National Development Council said on Wednesday.
The total score of constituent monitors shed one point from a month earlier to 19, suggesting that the economy lost further steam and might not improve this month, judging by a growing number of novel coronavirus infections worldwide.
The council uses a five-color system to portray the state of the economy, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors indicate a transition.
“Service firms might start to recover next month, but manufacturers would need more time to emerge from the virus crisis,” council researcher Wu Ming-hui (吳明蕙) told a media briefing.
Major international research institutes have forecast a sharper quarterly contraction for the global economy this quarter, which is unfavorable for Taiwan’s exports, Wu said.
The gloomy sentiment last month weighed on manufacturing sales, industrial output, wholesale and retail, as well as restaurant operation, the council said in a report.
On the other hand, imports of electrical and machinery picked up significantly, a positive sign that usually stems from the technology upgrade and capacity expansion needs of local firms, Wu said.
Although most countries have reopened their economies, corporate confidence and investment interest remain soft, she said.
The leading indicator series, which aims to predict the economic scene in the coming six months, fell 1.94 percent to 96.07, weakening for the sixth consecutive month, the council said.
Almost all subindices lost points except the gauge on the M1B, or cash and equivalents, as low interest rates successfully drove money from time deposits to investment activity, it said.
The coincident indicators, which reflect the current economic situation, declined across the board by 0.87 percent to 98.62, it added.
Shops and restaurants would start coming out of the woods next month, when authorities lift social gathering restrictions on June 7, Wu said.
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