Taiwan economy shows signs of booming in June

Taipei, July 29 (CNA) On the back of solid global demand for semiconductors and servers, Taiwan's export-oriented economy showed signs of booming in June, flashing the first "red light" since December 2021, the National Development Council (NDC) said Monday.

Another index of leading indicators assessing the state of the economy over the next three to six months also moved higher in June, the NDC said.

Data compiled by the NDC indicated the composite index of economic indicators rose two points from a month earlier to 38 to flash a red light, which ranges from 38-45, compared with a green light in May.

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 a booming economy.

Among the nine factors in the June composite index of economic indicators, the sub-index for merchandise exports rose two points from a month earlier in June to flash a red light, improving from a green light in May, the NDC said.

The sub-index on overtime work hours in the industrial and services industries rose one point, flashing a yellow-red light in June, compared with a green light in May, the NDC added.

In contrast, business sentiment among manufacturers fell one point from a month earlier to flash a green light in June, a downgrade from a yellow-red light in May, according to the NDC.

The sub-indexes for six other factors -- money supply, stock price changes, industrial production, imports of machinery and electric equipment, sales posted by the manufacturing sector, revenue generated by the wholesale, retail and food/beverage sector -- remained unchanged from a month earlier, the NDC said.

In June, the leading indicators rose 0.70 percent from a month earlier to 103.59, according to the NDC.

Among the seven factors that make up the June leading indicators, the sub-indexes for six factors -- imports of semiconductor equipment, stock price changes, export orders, business sentiment in the manufacturing sector, employment and money supply -- moved higher from a month earlier in June, the NDC said.

Only the sub-index for the floor area of new construction projects moved lower from a month earlier, the NDC added.

The data shows the momentum of the local economy continued to accelerate, the NDC said.

Economic outlook

In the second half of this year, Taiwan's economy will continue to benefit from a recovery in end-user demand on global markets and an increase in buyers' willingness to rebuild inventories, the NDC added.

In addition, the rising popularity of emerging technologies and peak season effects in the tech sector will also help to boost Taiwan's export performance in the second half of the year, the NDC said.

However, the NDC cautioned that upcoming elections in major economies, lingering geopolitical unease, continued trade tensions and possible adjustments in the monetary policies of the major central banks are expected to create uncertainties for the global economy.