Taiwan's economy remains sluggish but leading indicators rise

07/27/2020 09:07 PM
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Taipei, July 27 (CNA) Taiwan's economy showed sluggishness in June for a fourth consecutive month, but indicators predicting the country's economic performance over the next few months improved for a second straight month, the National Development Council (NDC) said Monday.

The composite index of monitoring indicators, which reflects current economic conditions, continued to flash a yellow-blue light in June and remained at 19 points, said the NDC, the country's top economic planning agency.

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

The index of leading indicators, which predicts economic performance over the next three to six months, rose 0.50 percent in June from a month earlier to 100.01, according to the NDC.

That was the second consecutive month of growth, reflecting the gradual decline in adverse effects posed by COVID-19, according to the NDC.

The leading indicators index, however, only increased a combined 0.75 percent in May and June, meaning the economy cannot be said to have bottomed out, said Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development.

The leading indicators index has to rise five consecutive months and grow by a cumulative 5 percent over five months before signaling a significant economic improvement, Wu said.

In June, the local stock market and the retail and food and beverage sectors did get a boost from Taiwan's success in containing the COVID-19 pandemic and an improvement in public and business sentiment toward the country's economic outlook, according to Wu.

Other positive trends, the NDC said, was the rapid growth of 5G communications and high-performance computing apps, increased demand for devices supporting remote work, and more investment from overseas Taiwanese businesses, which should continue to help bolster the country's exports.

Concerns over the global resurgence of COVID-19 cases and growing political and trade tensions among major countries could hurt global demand, however, which would negatively affect Taiwan's export-oriented economy, the NDC warned.

(By Su Ssu-yun and Evelyn Kao)

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