The government’s business climate monitor last month slipped back into “blue” as exports posted negative growth, in line with Taiwan’s nascent and fragile economic recovery, the National Development Council (NDC) said yesterday.
The retreat, due mainly to a downturn in exports, would be short term, NDC Economic Department Deputy Director Chiu Chiu-ying (邱秋瑩) told a news conference in Taipei.
“The nation’s economy remains on course for recovery, even though the pace is slow and weak,” Chiu said, adding that things would improve from this month.
Photo: CNA
The total score for the climate monitor fell 1 point to 16, dragged by a smaller reading in exports, she said.
Inventory corrections turned out longer than expected, but are drawing to an end, she said.
The fast-growing field of artificial intelligence applications provide a growth catalyst, with lingering uncertainty from geopolitical tensions, stubborn inflation and restrictive monetary policy, she said.
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.
Although exports last month returned to contraction after a rebound the previous month, the healthy volume of exports suggested a reliable pickup is around the corner, Chiu said, adding that the monitor has high chance of turning “yellow-blue” this month.
The arrival of the holiday season in Western countries would ramp up business at local firms in the global supply chains of smartphones, personal computers and peripheral products, she said.
The stock price index flashed a “red” signal as global funds sensed the recovery and increased holdings in local shares, the council said.
At the same time, the job market remained resilient, while retail and restaurant sales continued to improve, lending support to increased domestic demand, it said.
The index of leading indicators, which aims to forecast economic conditions six months ahead, weakened 0.71 percent to 97.64, as almost all constituent measures lost value except for the subindex of business confidence, it found.
The index of coincident indicators, which reflects the current economic situation, increased 1.28 percent to 100.76, with all components displaying positive cyclical movements, it said.
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