Taiwan's economy continues to warm in April amid strong AI demand

Taipei, May 27 (CNA) Taiwan's economic index indicated a warming economy in April, driven by strong demand for artificial intelligence (AI) applications that boosted the manufacturing sector, the National Development Council (NDC) said Tuesday.

For the fourth consecutive month, the NDC's composite index signaled a warming economy by staying in the yellow-red range. The index fell two points from March, settling at 33 in April.

The NDC uses a five-color system to track the economy: red signals overheating (38-45 points), yellow-red indicates a warming economy (32-37 points), green means stable growth (23-31 points), yellow-blue reflects sluggishness (17-22 points) and blue denotes recession (9-16 points).

Among the nine factors in April's composite index, those measuring manufacturing sector sales showed a red signal -- up from yellow-red -- according to the data.

The boost was driven mainly by strong demand for emerging technologies such as AI and high-performance computing (HPC) devices, as well as a surge in orders placed ahead of schedule before higher U.S. tariffs took effect, Chiu Chiu-ying (邱秋瑩), head of the NDC's Department of Economic Development, said at a news briefing.

However, affected by U.S. tariff policies, the sub-index for stock price changes dropped from yellow-red to yellow-blue, while the sub-index for manufacturers' business sentiment fell from yellow-blue to blue, the NDC said in a statement.

The remaining six indicators -- merchandise exports, money supply, overtime hours in the industrial and service sectors, imports of machinery and electronic equipment, industrial production, and revenue generated by retailers, wholesalers and food and beverage sectors -- remained unchanged, the NDC said.

In addition, the NDC's trend-adjusted leading indicators index, which forecasts economic conditions over the next six months, fell 0.81 percent to 100.37 in April, while the coincident indicators index, reflecting the current state of the economy, rose 1.59 percent to 107.97.

Looking ahead, Chiu said that U.S. President Donald Trump's inconsistent tariff policies could create uncertainty for the economic outlook.

On April 2, Trump announced that Washington would impose "reciprocal" tariffs on global trading partners, but the plan was later paused for 90 days. Under the proposal, goods from Taiwan would have faced import duties of up to 32 percent.