Taiwan economy could flash 2nd straight ‘yellow-blue light’


TAIPEI, Taiwan — Taiwan’s economy is likely to flash yellow-blue for the second consecutive month in May, signaling a sluggish performance, with several factors such as retail and wholesale sales in the doldrums, according to the National Development Council (NDC).

The local economy flashes a different color based on how the NDC’s composite monitoring indicator fluctuates. The NDC said the index for May will remain unchanged from April.

The NDC is scheduled to publish economic composite index data for May on Tuesday.

In April, the economic monitoring composite index fell three points to 21, falling into the yellow-blue category which ranges from 17-22, ending nine consecutive months of “green” which represents stability, with an index ranging from 23-31.

The NDC said that while local exporters continued to perform well in April, that was compromised by the appreciation of the Taiwan dollar against the U.S. dollar which weakened momentum in merchandise exports to some extent, while the month’s machinery imports also fared worse.

The council uses a five-color system to gauge the country’s economic performance, with blue indicating economic recession, yellow-blue representing economic sluggishness, green denoting stable growth, yellow-red referring to a warming economy and red pointing to economic overheating.

The composite monitoring index is comprised of nine factors.

For May, the NDC said the sub-indexes for money supply, industrial production, revenue posted by the retail, wholesale and restaurant/food/beverage sectors continued to flash yellow-blue, while machinery imports are green.

The slowdown in retail sales echoed forecasts by several local think tanks which said private consumption was not strong enough and the effects of an improving export performance have not trickled down to many consumers.

However, the sub-index for share prices will flash yellow-red as the local equity market continued its uptrend last month. The weighted index on the local main board breached the 10,000 point mark for the first time in 17 years on May 11 and continues to steam ahead, led by the bellwether electronics sector.