Taipei, June 27 (CNA) Taiwan's economy continued to be affected by the gloomy global outlook in May, government indicators showed Wednesday.
The composite index of monitoring indicators rose to 15 in May from 14 the previous month, according to data compiled by the Cabinet-level Council for Economic Planning and Development.
The index has a scale of between nine and 45, with the lowest range -- nine to 16 -- represented by a blue light.
May flashed a blue light for the seventh consecutive month, the longest blue-light period since the global financial crisis of late 2008 and 2009 battered Taiwan and the third-longest since the council launched the system in 1977.
The council uses a five-color system to describe the state of the economy, with red, yellow-red, green, yellow-blue and blue representing overheated, warm, stable, cool and sluggish, respectively.
Hung Jui-bin, director-general of the council's Department of Economic Research, attributed the one-point gain of the index to the rising sales index of wholesale, retail and food services.
"The retail sector was the main driver of the sales index," he told a press briefing, adding that retail sales of motor vehicles and related parts and accessories rose substantially in May from the year-earlier period.
The other eight sub-indices remained unchanged, he added.
The trend-adjusted index of coincident indicators, which reflect economic activity in the period measured, rose 0.6 percent to 97.9 in May, while the index of leading indicators, which gauge economic performance in three to six months, rose 0.5 percent from April to 131.4.
Hung noted that the annualized six-month rate of change of the composite leading index, which rose 0.3 percentage points to 6.2 percent in May, indicates an improving economy.
Of the seven components that make up the trend-adjusted index, the book-to-bill ratio of the semiconductor industry, the average monthly overtime in the industrial and service sectors, as well as the stock price index, were the only three with positive cyclical movements compared with the previous month.
Hung continued that despite concern over the European debt crisis and slower economic growth in China, Taiwan's economic performance should improve as the manufacturing sector picks up strength.
Citing a forecast by market research firm Global Insight for worldwide economic growth, Hung said Taiwan is expected to exhibit better performance in 2012 than Hong Kong, Singapore and South Korea.
He cautioned, however, that the recovery will not be strong.
"Boosting domestic consumption and investment should be the priorities, as the outlook for the global economy overall is still gloomy," Hung said.
Weak global economic fundamentals led the government to lower its 2012 economic growth forecast for Taiwan from 3.38 percent to 3.03 percent in May, while some local economic think tanks and foreign banks cut their growth predictions for June to below 3 percent.
(By James Lee)