The government’s business climate monitor in January flashed “green” after a 17-month hiatus, indicating steady growth, as exports, industrial output and other major economic barometers rose on improving end-market demand, the National Development Council (NDC) said yesterday.
The total score of the monitor’s composite index rose 5 points to a 19-month high of 27, as global inventory adjustments approached an end, allowing demand for commodities to gain traction, the council said.
“Despite the positive turn, the council would maintain a cautious view,” NDC research director Wu Ming-huei (吳明蕙) said, adding that the composite index could slip due to holiday disruptions last month.
Photo: CNA
The council uses a five-color system to measure the nation’s economic state, with green indicating steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest a transition to a stronger or weaker condition.
Downside risks linked to global inflation, monetary tightening and geopolitical tensions linger, meriting a careful attitude, Wu said.
The council last month introduced a new calculation system for the composite index, but the value, 27, was the same in both versions, meaning the recovery is concrete, she said.
Of its nine components, exports, overtime work, manufacturing sales and business confidence readings bounced or stayed in healthy territory, the council said.
The stock price index indicated a boom, while retail, wholesale and restaurant revenues flashed “yellow-red” to reflect active business ahead of the Lunar New Year holiday, although the measures on imports of electrical and machinery equipment, as well as money supply, registered “yellow-blue,” leaving much room to be desired, it said.
The index of leading indicators, which aims to project economic conditions six months ahead, expanded 0.8 percent to 101.37 in January, as all seven subindices showed positive cyclical movements.
Taiwan’s economy is benefiting from surging demand for artificial intelligence investments and applications, the NDC said, adding that global pursuit of net zero carbon emissions would also support the development of renewable energy sources in Taiwan, favorable for private investment and well-paying jobs.
The leading indicators have augmented for the past four months with a cumulative rise of 2.28 percent, consistent with GDP growth of more than 3 percent for this year, Wu said.
The index of coincident indicators, which mirrors the current economic situation, grew 0.28 percent to 99.99 in January, rising for 10 consecutive months, as losses in measures on exports, electricity usage and overtime work were offset by gains in industrial output, manufacturing sales, and retail, wholesale and restaurant sales, the council said.
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