Taiwan economic indicators stay strong for 9th straight month: NDC

Taipei, Sept. 29 (CNA) Taiwan's economy maintained strong momentum in August, with an index gauging economic conditions flashing a "red" light, indicating a booming economy, for the ninth consecutive month on robust exports and a high-flying stock market amid the global artificial intelligence (AI) boom, the National Development Council (NDC) said Tuesday.

Data compiled by the NDC showed that the August composite index of economic indicators remained unchanged at 41 points from July, flashing a "red" light for the ninth consecutive month, tying the record for the longest period of a booming economy with the February-October period in 2021, when the economy staged a strong rebound following the COVID-19 pandemic.

The score for the "red" light category ranges from 38 to 45.

Under the NDC's five-color system, red signals a booming economy or possible overheating, while green indicates stable conditions and blue signals weakness. Yellow-red and yellow-blue represent transitions between green and red or between green and blue, respectively.

According to the NDC, the composite index hit a historical high of 42 points in January 1984.

Among the nine components of the August composite index, all remained unchanged from July, with share price changes, industrial production, merchandise exports, imports of machinery and electrical equipment, manufacturing sales, and revenue generated by retail, wholesale and food and beverage businesses all flashing red lights, indicating a booming economy, the NDC said.

Meanwhile, money supply flashed a "green" light, indicating stable conditions, while overtime hours in the industrial and service sectors and manufacturers' business sentiment continued to flash "yellow-red" lights, representing a transition between stable and booming conditions.

Chen Mei-chu (陳美菊), head of the NDC's Department of Economic Development, said Taiwan's economy could flash another red light in September, as the ongoing AI boom and the traditional peak season in the global technology market are expected to drive economic growth by further boosting exports and private investment.

While a spike in U.S. Treasury yields could push up borrowing costs for American companies, Chen said cloud service providers are expected to continue investing heavily in AI infrastructure, which will help Taiwan's economy maintain its growth momentum.

In August, the leading indicators index, which gauges the economic outlook for the following six months, continued to rise, increasing 0.51 percent from a month earlier to 104.41, according to the NDC.

Among the seven components of the August leading indicators index, export orders, share prices, total floor area of new construction projects, semiconductor equipment imports and manufacturers' business sentiment moved higher. However, the subindexes for money supply and employment moved lower.

August marked the 13th consecutive month in which the leading indicators index increased, the NDC said, adding that the index rose 6.06 percent during the 13-month period, largely driven by a strong stock market and increases in exports and semiconductor equipment imports.