Taiwan’s economy turns sluggish in March due to COVID-19 pandemic

CNA file photo

TAIPEI (CNA) — Taiwan’s economic indicators signaled economic sluggishness in March for the first time in four months due to the adverse effects of the new coronavirus disease (COVID-19), the National Development Council (NDC) said Monday.

The composite index of monitoring indicators flashed a yellow-blue light at 20 points, down from 24 and a green light in February, according to data compiled by the NDC, Taiwan’s top economic planning agency.

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

Out of the nine factors in the composite index for March, the sub-indexes for monetary aggregates (M1B) and manufacturing shipments remained green lights, while the sub-index for exports flashed a blue light, compared with a green light a month earlier, the NDC said.

Meanwhile, the trend-adjusted index of leading indicators, which forecasts economic conditions in the coming three to six months, fell for a sixth consecutive month to 97.61 in March, according to NDC figures.

Wu Ming-hui (吳明蕙), head of the NDC’s Department of Economic Development, said Taiwan’s economic performance will likely weaken in the coming months, mainly due to the disruption caused by the COVID-19 pandemic, which has taken a toll on the world’s major economies.

Though the virus appears to be coming under control in Taiwan, its export-oriented economy will continue to feel the pinch, in particularly the country’s manufacturing sector, Wu predicted.

Lai Cheng-yi (賴正鎰), chairman of the General Chamber of Commerce of the Republic of China, was more optimistic, arguing that the economy could bounce back sometime in the third quarter when the COVID-19 situation improves.

Lai drew some of that optimism from Health Minister Chen Shih-chung (陳時中), who said at a daily briefing in Taipei on Monday that COVID-19 in Taiwan could subside after June, given that no local transmissions of the disease have been reported for the past 15 days.

If Taiwan can maintain zero domestic cases through June, it would be a positive signal and stimulate consumer spending, allowing the local economy to get back on track, Lai said.