The government’s business climate monitor last month flashed “yellow-blue,” ending 10 straight months of a recessionary state as exports returned to growth amid rising demand for information and communications technology devices used in artificial intelligence (AI), the National Development Council (NDC) said yesterday.
“The nation’s economy definitely showed signs of upturn, though in a wobbly fashion,” NDC Economic Department Deputy Director Chiu Chiu-ying (邱秋瑩) told a news conference in Taipei.
The council would closely monitor the economic situation at home and abroad, as it would be premature to anticipate stable growth without the possibility of derailment and fluctuations, Chiu said.
Photo: CNA
The climate monitor gained 2 points to 17, just enough to end the recessionary state that had plagued Taiwan for the past 10 months due to poor end-market demand for electronics, mainly chips.
The council uses a five-color system to measure the nation’s economic health, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest a transition to a stronger or weaker state.
A continued boom in AI demand ramped up business at Taiwanese firms in the global supply chain and allowed the crucial subindex of exports to turn green, Chiu said.
Exports would put up a good showing this quarter, despite a relatively high base last year, and the pace of recovery would improve each month, she said.
MediaTek Inc (聯發科), the largest chip designer in Taiwan, told an online investors’ conference that it is looking at an increase of 9 to 15 percent in revenue this quarter as customers have shown keen interest in its latest-generation chips that highlight faster computing capability and lower energy use.
Smartphone and notebook computer vendors are building inventory ahead of the Singles’ Day shopping festival in China on Nov. 11, one year after the vast market ditched most of its COVID-19 restrictions.
The index of leading indicators, which aims to forecast the economic scene six months ahead, lost 0.77 percent to 97.88, falling for the sixth consecutive month, the council said.
Most components displayed negative cyclical movements, with the manufacturing business climate and stock prices the only exceptions, it said.
The index of coincident indicators, which reflects the current economic situation, rose 1.3 percent to 99.49, with all subindices moving upward, it said.
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