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Taiwan economy remains sluggish

2018/11/27 19:35

Taipei, Nov. 27 (CNA) Taiwan's economy continued to show sluggish growth in October as the local equity market, one of the major factors in determining the economic climate, tumbled in the month amid trade tension between the United States and China, the National Development Council (NDC) said Tuesday.

The sentiment of the local manufacturing sector toward the business outlook also weakened, keeping the economy in sluggish growth, the NDC said.

The NDC's composite index of monitoring indicators for October remained unchanged from a month earlier to stand at 22 points, flashing a yellow-blue light, which ranges between 17 and 22.

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 latest data shows that while the local economy was still growing, the pace was not quick enough, the NDC said.

Out of the nine factors in the index, three of them moved lower in October with the sub-index on share price changes falling to flash a yellow-blue light, a downgrade from a green light a month earlier, the NDC said.

In October, the benchmark weighted index on the Taiwan Stock Exchange, or Taiex, fell about 1,200 points, or 10.94 percent, from a month earlier in the wake of a drop on Wall Street amid escalating trade tensions between Washington and Beijing.

The sub-index on manufacturers' sentiment toward their business outlook also fell, flashing a blue light in October compared with a yellow-blue light in September, while the sub-index on non-farm payrolls also flashed a yellow-blue light, the NDC said.

However, the sub-indexes on money supply, industrial production, merchandise exports, machinery and electrical equipment imports, sales generated by the manufacturing sector, and revenue posted by the retail, wholesale and food/beverage sectors moved higher to offset the growth declines in the other three sectors, the NDC said.

Meanwhile, the index of leading indicators, which is used to gauge the economic outlook for the coming six months, fell for the fifth consecutive month in October, dropping 0.60 from a month earlier.

The NDC said the peak season effect could boost Taiwan's exports in the fourth quarter, but the local economy is expected to feel the impact arising of the continuing Washington-Beijing trade dispute, interest rate hikes by major central banks and geopolitical tension.

(By Pan Tzu-yu and Frances Huang)Enditem/J