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Taiwan economy shows sluggish growth for January

2018/03/07 20:22:08

CNA file photo

Taipei, March 7 (CNA) The domestic economy flashed a "yellow-blue light" for the second consecutive month in January, pointing to sluggish growth, with the index of economic indicators dropping two points from a month earlier, the National Development Council (NDC) said Wednesday.

NDC data showed that the composite index of monitoring indicators fell to 20 in January, but remained in the yellow-blue range of 17-22.

The two-point drop was attributed to a decline in exports in Taiwan dollar terms, as the local currency appreciated against the U.S. dollar in January, while industrial production fell due to a relatively high comparison base over the same period of last year, according to the NDC.

The NDC uses a five-color system to gauge the country's economic performance, with blue indicating economic recession, yellow-blue representing economic sluggishness, green denoting stable growth, yellow-red referring to a warming economy and red pointing to economic overheating.

The index of leading indicators for January rose 0.08 percent from a month earlier to 101.62, the NDC data showed.

Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said the index of leading indicators, which gauges the economic outlook for the upcoming six-month period, rose for the seventh straight month, suggesting continued growth.

Last month, the Directorate General of Budget, Accounting and Statistics raised its 2018 forecast for Taiwan's gross domestic product growth from 2.29 percent to 2.42 percent, citing expected higher private consumption and investment.

In addition to exports and industrial production, the composite index of monitoring indicators also includes other seven factors.

Like the sub-indexes for exports and industrial production, those for non-farm payrolls and sales generated by the manufacturing sector also fell in January from a month earlier, the NDC said.

However, the sub-indexes for money supply, equity prices, imports of machinery and electrical equipment, sales posted by wholesale, retail and food/beverage sector, and manufacturers' sentiment toward their business outlook moved higher in January.

Wu said the local semiconductor sector is keen to develop high-end technology, which is expected to boost domestic demand in the future, while the government is pushing for infrastructure work and technology innovations that could strengthen the local economy.

She warned, however, that volatility in the global financial markets and growing trade protectionism could create uncertainty in the domestic economy.

(By Chu Che-wei and Frances Huang)
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