The government’s business climate monitor last month flashed a 10th consecutive “blue” signal indicating a recessionary state after all economic indicators remained sluggish, although a decline in exports mitigated the situation, the National Development Council (NDC) said yesterday.
The total value of the nine monitoring components stayed unchanged at 15, making the contraction longer than that during the global financial crisis in 2008, and on par with the downturn during Europe’s debt problems in 2011 and the technology correction cycle in 2015, the council said.
“The score dropped to 10 in February and had since moved slowly upward, suggesting the worst is over,” deputy director of the council’s economic department Chiu Chiu-ying (邱秋瑩) told a news conference.
Photo: CNA
The latest improvement came after the retreat in exports eased, but the data on monetary supply measures worsened, the council said.
Foreign portfolio managers usually take shelter in the US dollar in bad times, while people put money away in time deposits to avoid risk.
Strong artificial intelligence (AI) demand allowed outbound shipments of information and communications technology products to register a rapid pickup last month and the release of new-generation mobile gadgets this month would lead to further growth momentum in the run-up to the Christmas season, Chiu said.
The council uses a five-color system to portray the nation’s economic health, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest transition to a stronger or weaker state.
The retreat in industrial output also narrowed for similar reasons, Chiu said.
Domestically, the job market was stable, while retail and dining revenues continued to grow, she said.
However, securities accounts took a downturn as AI shares went through price corrections and weighed on demand for cash and cash equivalents, the council said.
The index of leading indicator series, which aims to foretell the economic scene six months ahead, shrank 0.3 percent to 99.06, it said.
The movement came after business confidence, stock prices and construction floor space gave positive cyclical readings, but labor accession rates and imports of semiconductor equipment deteriorated, the council said.
By contrast, the index of coincident indicators, which reflects the current economic situation, picked up 0.91 percent to 97.48, helped by better data on exports, non-farm payrolls, industrial production and electricity usage, it said.
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