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Taiwan's economy has third straight month of strong growth in April

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CNA photo May 27, 2021
Taipei, May 27 (CNA) Taiwan's economic fundamentals remained strong in April with an index gauging the economic climate flashing a "red light" for the third consecutive month, according to the National Development Council (NDC).

The composite index of monitoring indicators, which reflects the existing economic situation, moved up one point from a month earlier to 41 in April, data released by the NDC, the government's top economic planning agency, showed Thursday.

The index reached its highest level since May 1987.

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 warming economy and red pointing to an overheating or booming economy.

In addition, the leading economic indicators, which project economic activity over the next three to six months, dropped by 0.02 percent from a month earlier to 104.72, the NDC said.

Wu Ming-hui, head of the NDC's Department of Economic Development, said the decrease can be attributed to the total floor area of new construction projects, which is one of the seven factors that make up the leading indicator, as it moved lower in April.

According to the NDC data, five of the seven factors that comprise the indicator -- money supply, changes in share prices, employment, business sentiment among manufacturers, and semiconductor equipment imports -- showed signs of improving.

However, following the deterioration in Taiwan's COVID-19 situation, Wu expects leading indicators for restaurants, wholesale and retail businesses to be greatly affected in the coming months.

Taiwan's economic climate will only turn from red to yellow-red if the composite index of monitoring indicators drops below 38, she said, adding that the the country's economic performance in June needs to be closely monitored.

As long as the government is able to keep the COVID-19 situation under control, Wu said the impact will be limited to the domestic market and not affect export orders.

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