The government’s business climate monitor remained “yellow-red” in January, suggesting the nation’s economy was still strong, although it slightly lost momentum, the National Development Council (NDC) said yesterday.
The total score of all constituent readings was 36, down 2 points from a month earlier, as the TAIEX and business confidence softened a bit, the council said.
The local bourse swung wildly in January amid heightened geopolitical tensions and unease over interest rate hikes by major global central banks, NDC research director Wu Ming-huei (吳明蕙) said.
Photo: Ann Wang, Reuters
The council uses a five-color system to depict the nation’s economic state, with “green” indicating steady growth, “red” suggesting a boom and “blue” signaling a recession. Dual colors indicate a shift to a stronger or weaker state.
The decline in points should not be seen as signaling an economic turnaround, because Taiwan’s economy has plateaued, Wu said.
Russia’s invasion of Ukraine has so far had little impact on Taiwan, as the nation has little trade with either country, Wu said, adding that the fallout would likely be limited to the financial sector, as global expectations of supply disruptions have boosted the prices of oil and grain.
Russia is a major producer of crude oil and grain.
Wu cited robust exports, a strong local currency and general pay hikes as evidence that Taiwan’s economy has held firm.
The index of leading indicators, which is used to predict the economic situation in the coming six months, shrank 0.06 percent from a month earlier to 102.08, the council said.
The sub-indices on export orders and payrolls in the industrial and service sectors increased, while the remaining measures all declined, it said.
The index of coincident indicators, which reflects the current economic state, expanded 0.32 percent to 103.16, as utility consumption picked up and wholesale, retail and restaurant revenues improved, it said.
In related news, the consumer confidence index last month shed 0.48 points to 73.19, a National Central University survey showed.
People became more confident about job hunting, the economic outlook and household income, tipping the sub-indices up to 65.3, 77.9 and 90 respectively, the university said.
However, they were less satisfied with consumer prices, stock investments and purchases of durable goods, driving the readings down to 30.45, 49.7 and 125.8 respectively, it said.
Confidence values of 100 or more indicate optimism, while values lower than the threshold suggest pessimism.
The university polled 2,813 people by telephone from Feb. 18 to 21.
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