Local economy remains sluggish in October

11/28/2022 07:25 PM
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CNA file photo
CNA file photo

Taipei, Nov. 28 (CNA) Taiwan's economy remained in a sluggish condition for the second consecutive month in October, although an index gauging economic conditions rose slightly from a month earlier, the National Development Council (NDC) said Monday.

The leading indicators, which assess the economic climate over the next six months, moved lower from a month earlier in October, indicating a cautious economic outlook, said the NDC, the top economic planning agency in Taiwan.

Data compiled by the NDC showed that the composite index of monitoring indicators, which reflects the current economic situation, rose by one point from a month earlier to 18 but the economy still flashed a "yellow-blue" light, which is applied to a range of 17-22, pointing sluggish conditions.

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

According to the NDC, out of the nine parts of the composite index for October, the sub-index on imports of machinery and electrical equipment rose by two points from a month earlier to flash a red light, compared with a green light seen in September.

The sub-index on money supply fell by one point from a month earlier to flash a yellow-blue light, a downgrade from a green light a month earlier.

Graphic: National Development Council
Graphic: National Development Council

The other seven parts -- stock price change, industrial production, non-farm payrolls, merchandise exports, revenue posted by the manufacturing industry, sales generated by the wholesale, retail, food and beverage businesses, and business sentiment among manufacturers -- remained unchanged in October.

The NDC said Taiwan's exporters benefited from solid global demand for emerging technologies such as data centers, high-performance computing devices, and automotive electronics, while eased concerns over the COVID-19 pandemic pushed up domestic consumption.

However, the global economy showed signs of weakening at a time of a rate hike cycle to fight inflation worldwide and volatility in the global stock markets affected the local economy, the NDC added.

In October, the leading indicators fell by 0.97 percent from a month earlier to 95.63, marking the 12th consecutive month with a month-on-month decline, the NDC said.

Among the seven leading indicators, only the sub-index on imports of semiconductor equipment rose from a month earlier in October.

● Taiwan's semiconductor equipment imports up 80% over last 5 years

Meanwhile, the sub-indexes for the other six -- export orders, stock price changes, business sentiment among manufacturers, money supply, employment, and the amount of floor areas in new property projects -- moved lower during the month, according to the NDC.

The agency said worries over fast-growing inflation and the continued tightening of monetary policy remained in place, while geopolitical risks resulting from the invasion of Ukraine by Russia and China's zero tolerance COVID-19 policy were expected to create uncertainty in the global economy.

(By Pan Tzu-yu and Frances Huang)

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