The government’s business climate monitor last month flashed “red” for the sixth straight month, signaling a continued economic boom even though the overall score shrank slightly due to a local COVID-19 outbreak, the National Development Council (NDC) said yesterday.
The gauge shed 2 points to 38 and could falter this month as the low-base effect tapers off, NDC research director Wu Ming-huei (吳明蕙) said.
“Regardless, the nation’s economy should stay on a stable course in the foreseeable future, thanks to strong exports, industrial production and private investment, while virus containment measures crimp business for service sectors,” Wu told a news conference in Taipei.
Photo: CNA
The council uses a five-color system to portray the nation’s economic state, with “green” indicating steady growth, “red” suggesting a boom and “blue” signaling a recession. Dual colors indicate a transition.
Lackluster retail, wholesale and restaurant revenues accounted for the decline of 2 points, while other indicators held steady, Wu said.
On the trade front, demand for electronics gained momentum as international technology brands are about to release new-generation products to meet back-to-school and holiday demand, the official said.
Taiwan is home to the world’s leading manufacturers of chips and other electronic components used in smartphones, laptops, wearables and vehicles.
Export orders, a critical barometer of actual exports one to three months ahead, last month expanded 21.4 percent year-on-year to US$55.3 billion, boding well for Taiwan’s export-focused economy, the Ministry of Economic Affairs said earlier this week.
The index of leading indicators, which seeks to predict the economic situation in the next six months, softened 0.66 percent to 100.47, as all constituent measures lost points except for the reading on local share prices, the council’s report found.
A local COVID-19 outbreak caused retreats in business confidence, labor accession rates and construction floor areas, Wu said, adding that the situation should improve as the outbreak subsides.
The index of coincident indicators, which reflects the current economic situation, pared 0.89 percent to 101.51, the council said.
Industrial production, sales of manufacturing goods and imports of capital equipment picked up, while non-farm payroll, electricity usage and export value pointed downward, it said.
The government is to help shore up domestic demand by distributing Quintuple Stimulus Vouchers likely in October, Wu said.
That would lend timely support to GDP growth at a time when a favorable base effect for exports wanes, the official said.
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