Taiwan's economy warms in January after briefly overheating

Taipei, Feb. 27 (CNA) Taiwan's index gauging the state of the economy flashed a yellow-red light in January, indicating a warming economy, down from a red light indicating overheating in the previous month, according to National Development Council (NDC) data released on Thursday.

The composite index of economic indicators dropped by four points from a month earlier to 34, to flash a yellow-red light, which ranges between 32 and 37, compared with a red light in December 2024, the NDC said.

Last December, the NDC's composite index of economic indicators rose by four points from the previous month to 38, a four-month high, to flash a red light, up from a yellow-red light last November.

December was the third month in 2024, along with June and August, in which the NDC's composite index flashed a red light.

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 moderately hot economy, and red pointing to an overheated economy.

Among the nine factors in January's composite index, the subindex for merchandise exports flashed a red light, up from a yellow-red light a month earlier, while that for money supply flashed a blue light, down from a yellow-blue light.

The subindex for the sales posted by the manufacturing sector turned to flash a green light, down from a red light, while that for revenue generated by retailers, wholesalers, and food and beverage flashed a yellow-blue light, down from a yellow-red light.

The other five factors in the January composite index of economic indicators -- changes in stock prices, overtime hours in the industrial and service sector, imports of machinery and electric equipment, business sentiment among manufacturers, and industrial production -- remained unchanged, the NDC said.

Speaking with reporters, Chen Mei-chu (陳美菊), deputy head of the NDC's Department of Economic Development, said seasonal adjustments to the composite index could not fully eliminate the effects of January's Lunar New Year holiday.

Therefore, the data for January and February should be combined to better reflect the actual situation, Chen added.

In January, the NDC's trend-adjusted index of leading indicators, which gauges the economic climate over the next six months, rose 0.32 percent from a month earlier to 102.37, while the coincident indicators index, reflecting the current state of the economy, rose 0.20 percent from a month earlier to 104.28.

The increases in the two indexes reflect moderate growth in the domestic economy, Chen said.