Taiwan continues to show warming economy in May: NDC

Taipei, June 27 (CNA) Taiwan's economic indicators showed signs of a warming economy for the second consecutive month in May as demand for artificial intelligence (AI) applications continued to grow, the National Development Council (NDC) said Thursday.

The composite index of monitoring indicators remained at 35 points, flashing a "yellow-red light," the same as the previous month, 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.

Meanwhile, the nine factors in the composite index of economic indicators also remained unchanged from a month earlier -- money supply (yellow-blue), stock price changes (red), industrial production (red), overtime hours in the industrial and service sectors (green), customs-cleared exports (green), imports of machinery and electric equipment (red), producer shipments for manufacturing (yellow-red), retail, wholesale and food/beverage industry sales (red), and manufacturing sector sales and business sentiment among manufacturers (green).

Demand for AI applications continued to remain high, which helped drive the indicators for domestic production as well as imports of machinery and electrical equipment, the NDC said.

Wu Ming-hui (吳明蕙), head of the council's Department of Economic Development, said Taiwan's high-tech sector continues to show booming growth while traditional industry gradually recovers.

Some industries have also been ramping up production as their product inventories become depleted, Wu said, indicating that this is reflected in the purchasing managers' index (PMI), a measure of the prevailing direction of economic trends in manufacturing, which has been trending upward.

The May indicators signal that the momentum of Taiwan's economic recovery is gradually strengthening, she said, but warned that the global economic environment remains uncertain.

Citing examples, the department head said indicators for consumer spending in the United States recently fell below expectations while the European economy also showed signs of sluggish growth.

The leading economic indicators, or PMI, of major economies around the world have failed to show signs of steady expansion, Wu said.

While the domestic economy continues to recover, uncertainties such as divergent global monetary policies, increasing trade disputes between major economies, and changes in the international geopolitical situation could affect Taiwan's economic prospects, and such developments need to be closely monitored, she added.