The total score of the government’s business monitoring indicators for last month was 12 points, down from 18 points in October and flashing a “blue light” for the first time since December 2018, the National Development Council said in a report yesterday, implying further weakness in the nation’s export-reliant economy.
“Due to the Russia-Ukraine war, high inflation and the accelerated monetary tightening by central banks this year, the growth momentum of the global economy has weakened and demand in the end market has declined, while the supply chain has continued to deplete inventories,” the council said.
That led Taiwan to report falling exports and dwindling wholesale trade last month, while imports of machinery and electrical equipment were also lower than a year earlier, it said.
Photo: CNA
The council uses a five-color spectrum to gauge economic health, with “blue” signaling recession, “green” suggesting steady growth and “red” indicating overheating. Dual colors mean it is in transition.
The score of 12 points last month was the lowest in 13 years, and it came as the index of leading indicators decreased for a 12th consecutive month and the index of coincident indicators dropped for the ninth consecutive month, the council said, adding that the government would be closely monitoring the economy.
“The current economic situation is relatively sluggish,” Department of Economic Development Director Wu Ming-huei (吳明蕙) said.
The index of leading indicators is used as a gauge for the economy’s direction in the coming six months. It decreased by 0.79 percent month-on-month to 95.70 last month, the report said.
Among the index’s seven components, only the reading on imports of semiconductor equipment made a positive contribution, it showed.
The other six components — the manufacturing sector, export orders, the TAIEX, floor area of building permits, real M1B money supply and net accession rate of employees — weighed on the composite index, it showed.
Last month’s index of coincident indicators, which tracks the current pace of economic activity, decreased by 2.15 percent to 92.92, as six of its seven components fell from the previous month, with the gauge for non-agricultural employment making the sole positive contribution, the report showed.
Apart from slowing industrial production and producers’ shipments, exports and capital equipment imports, power consumption, retail sales and wholesale trade also weakened, it showed.
Meanwhile, the index of lagging indicators weakened 0.2 percent to 102.82, a third consecutive month of retreat, led by declines in the gauges for loans and financial investments, as well as manufacturers’ inventories, it showed.
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