Taiwan's economic indicators show warming economy in April

Taipei, May 27 (CNA) Taiwan's economic indicators showed signs of a warming economy for the first time in over two years in April on the back of improving business activity, the National Development Council (NDC) said Monday.

The composite index of monitoring indicators rose four points from a month earlier to 35, flashing a "yellow-red light" for the first time since February 2022, according to data released by the NDC, Taiwan's top economic planning agency.

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.

Among the nine factors in the composite index of economic indicators, the sub-indexes for retail, wholesale and food/beverage industry sales, and imports of machinery and electric equipment all moved higher by two points to flash red lights in April, compared with green a month earlier, the NDC said.

The sub-index for industrial production rose by one point to turn from a yellow-red light to red in April, while manufacturing sector sales also grew one point to a red light, the council said, indicating that the sub-index for customs-cleared exports dropped two points to green.

The other four factors -- money supply (yellow-blue), stock price changes (red), overtime hours in the industrial and service sectors (green), and manufacturing sector sales and business sentiment among manufacturers (green) -- remained unchanged from a month earlier, according to the NDC data.

Wu Ming-hui (吳明蕙), head of the council's Department of Economic Development, said the increase in demand for artificial intelligence devices helped drive business activity in the information and communication equipment sector.

That strength, and improving external demand contributed to pushing the manufacturing sector sales and machinery import sub-indexes higher.

According to the NDC, the trend-adjusted leading index, which gauges the economic climate over the next six months, increased for a seventh consecutive month in April while the coincident index increased for a 13 consecutive month.

Taiwan's economy is steadily recovering, Wu said, noting, however, that there are still external risks.

A recovery in global demand currently remains uncertain, as S&P Global Ratings recently revised downward its annual growth forecast for global merchandise exports from the previous 5.1 percent to 4.3 percent and the United States has also taken new measures to impose tariffs on Chinese goods, she said.