Taiwan's economy warms in September: NDC

Taipei, Oct. 28 (CNA) Taiwan's economic monitoring indicator flashed a yellow-red light in September, signaling a warming economy after four consecutive months of green, which indicates stable growth, the National Development Council (NDC) said Tuesday.

The composite index of economic indicators, which gauges overall economic conditions, rose four points from August to 35 in September, within the 32-37 range for a yellow-red light, NDC data showed.

The increase was mainly driven by strong export momentum supported by robust demand for artificial intelligence (AI), high-performance computing (HPC), and cloud services, as well as the restocking of consumer electronics and a bullish local stock market following a U.S. Federal Reserve rate cut, said Chen Mei-chu (陳美菊), head of the NDC's Department of Economic Development.

The NDC uses a five-color system to depict economic trends: red for overheating (38-45), yellow-red for warming (32-37), green for stable growth (23-31), yellow-blue for slowdown (17-22) and blue for contraction (9-16).

Among the nine components of the index, manufacturing sales and changes in stock prices rose one point each from August, turning from yellow-red and yellow-blue respectively to red and yellow-red.

Meanwhile, revenue in the wholesale, retail, and food and beverage sectors gained two points, shifting from green in August to yellow-red, reflecting the strong performance of the Taiwan Stock Exchange.

The remaining six indicators -- industrial production, overtime hours, merchandise exports, machinery and electrical equipment imports, money supply (M1B), and manufacturers' business sentiment -- were unchanged from the previous month.

The index of leading indicators, which forecasts economic activity over the next three to six months, inched up 0.07 percent from August to 100.22 in September, while the coincident index, which tracks current conditions, slipped 0.11 percent to 105.27.

The NDC said the data suggest the economy remains on a growth trajectory but noted it will continue to monitor future developments closely.

Chen added that while Taiwan's traditional industries have been affected by U.S. tariff measures and sluggish auto and motorcycle sales, production in the chemical and plastics sectors has started to recover, and the decline in basic metals has narrowed. "The economy has stabilized," she said.

Regarding the NT$10,000 (US$326) cash handout program, Chen said surveys show most recipients plan to spend the money on travel or investment rather than savings, which could boost domestic consumption, with a clearer effect expected in December.

Looking ahead, Chen said composite index of economic indicators could remain in the green or higher range in the fourth quarter but cautioned that uncertainty remains over U.S.-China trade talks, global monetary policy, sustained AI demand and financial market volatility as Taiwan's stock market is already at a record high level.