Taiwan's economic monitoring indicator stays red in April on strong AI demand

Taipei, May 28 (CNA) Taiwan's economic monitoring indicator remained in the "red" range in April, signaling continued strong economic growth momentum amid robust demand for AI applications.

The composite score for April remained unchanged from the previous month at 39 points, with the indicator staying in the red range for the fifth consecutive month, the National Development Council (NDC) said in a news release Thursday.

Under the NDC's five-color system, red signals strong growth, while green indicates stable conditions and blue signals weakness.

The NDC said strong AI demand and easing geopolitical concerns in the Middle East helped improve manufacturers' outlook for the economy, while both leading and coincident indicators continued to rise.

"The momentum of domestic economic growth remains solid," the agency said.

According to the NDC's Business Indicators Database, both the leading index, which tracks the economic outlook for the next three to six months, and the coincident index, which reflects current economic conditions, continued to rise in April.

The leading index stood at 103.63 after adjusting for long-term trends, above the benchmark level of 100 that indicates stable economic conditions, while the coincident index rose to 107.57, suggesting growth momentum remained positive.

Among the nine components of the monitoring indicator, manufacturers' business sentiment improved from "yellow-blue" to "green" as strong AI demand and easing geopolitical concerns in the Middle East improved firms' economic outlook, the statement said.

Several indicators continued to post strong growth -- including export values, imports of machinery and electrical equipment, industrial production, and wholesale, retail and restaurant revenues -- all of which remained in the red zone.

Looking ahead, the NDC said expanding AI applications in areas such as edge computing, robotics and smart devices, along with sustained investment by semiconductor firms in advanced manufacturing and packaging capacity, are expected to support Taiwan's exports and investment momentum.

However, the NDC warned that geopolitical tensions in the Middle East, global inflationary pressure and uncertainty surrounding U.S. tariffs continued to pose risks to Taiwan's economic outlook.