Taiwan’s business climate monitor last month flashed “green,” but lost three points, indicating that the economy expanded despite heightened uncertainty, the National Development Council (NDC) said yesterday.
The total score was 24, the lowest since August 2020, as major economic barometers including exports, machinery equipment imports, non-farm payroll and stock prices declined, the council’s monthly report said.
“Uncertainty for exports looms large amid unfavorable developments abroad, but it is too early to interpret the trend as an economic turnaround,” NDC researcher Lin Tzu-fang (林慈芳) said.
Photo: CNA
US graphics card maker Nvidia Corp and notebook vendor Dell Technologies Inc reported disappointing earnings figures for the previous quarter on a slump in end-market demand, boding ill for local firms in their supply chain.
The council uses a five-color system to indicate the state of the nation’s economy, with “green” meaning steady growth, “red” suggesting a boom and “blue” signaling a recession. Dual colors indicate a shift to a stronger or weaker state.
There is no need to be overly pessimistic because an ongoing recovery in domestic demand would help mitigate the impact of external headwinds, the official said, adding that the current quarter would be the strongest in terms of GDP growth, based on the projection of the Directorate-General of Budget, Accounting and Statistics.
The upcoming release of next-generation smartphones by Apple Inc and other brands should shore up business at local assemblers, chipmakers, and suppliers of camera lenses, battery packs and other components, Lin said.
“Therefore, it is better to wait and see how things pan out,” Lin said.
The index of leading indicators, which forecasts the economic situation in the coming six months, shrank 1.56 percent to 95.89, as imports of semiconductor equipment showed positive cyclical movements and the remaining six measures showed retreats, the council said.
It is the ninth consecutive month that the index declined, with a cumulated fall of 7.33 percent, Lin said, adding that the magnitude of correction is not big enough to signal a turnaround.
The index of coincident indicators, which reflects the current economic situation, lost 1.08 percent to 98.33, as all sub-indices except the overall power consumption sub-index softened from one month earlier, the council said.
Domestic tourism has recovered some momentum and is expected to post increases in the coming quarters as authorities are expected to ease COVID-19 controls, it said.
Private investment would hold firm amid a global supply chain realignment, it said.
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