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Taiwan's economy flashes 4th straight yellow-blue light: NDC

2019/05/27 19:31:14

Taipei, May 27 (CNA) Taiwan's economy flashed a yellow-blue light for the fourth consecutive month in April, signaling sluggish growth, the National Development Council (NDC) said Monday.

The NDC said in a statement that the composite index of monitoring indicators for April rose by 1 point from the previous month to 21, which was still two points shy of the level needed to flash a green light, which would suggest stable growth.

The yellow-blue signal, which represents a range between 17 and 22, has flashed for four consecutive months since January, the NDC said.

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 composite monitoring index, meanwhile, is comprised of nine factors.

For April, the sub-indexes for industrial production, non-farm payroll, exports, revenue posted by the manufacturing sector and sales registered by the retail/wholesale/food and beverage sector flashed yellow-blue, the NDC said.

Meanwhile, the sub-indexes for money supply and stock market volatility flashed green, while the sub-indexes for machinery and electrical equipment imports flashed yellow-red, outperforming the other eight factors, the NDC said.

The sub-index for manufacturing sentiment flashed blue, the NDC added.

Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said that in face of the intensifying U.S.-China trade dispute, manufacturers are conservative in terms of confidence, because if the trade friction continues, they will be affected and even foreign trade will face great challenges.

Even so, Wu said she is not pessimistic at the economic outlook. The trade dispute will bring orders to Taiwan, she predicted, adding that the growth of domestic investment has been quite stable.

The import value of semiconductor equipment has shown double-digit growth for four consecutive months, while the total floor area for building construction has continued to increase, Wu went on, adding that returning Taiwanese firms have pledged over NT$310 billion (US$9.856 billion) in investment.

The increasing investment by global technology companies in Taiwan is also expected to drive up private investment, which will help the domestic economy, according to Wu.

However, as the U.S.-China trade tension heats up, the Organization for Economic Cooperation and Development and other organizations under the United Nations have revised downward their global economic growth prospects for this year, Wu said.

If the U.S. and China raise tariffs in the long term, it will cause a further slowdown in global economic and trade, coupled with increased global financial market volatility, financial vulnerability and geopolitical risk that could cause uncertainty for the domestic economy, Wu said.

(By Pan Tzu-yu and William Yen)