Taiwan's economic recovery still lacks momentum: CEPD
By John Liu , The China PostTAIPEI, Taiwan -- Taiwan's overall monitoring indicator dropped by 1 point to 19 in September and flashed a “yellow-blue” signal, signifying an economy transitioning from sluggish to stable, according to a report released yesterday by the Cabinet's Council for Economic Planning and Development (CEPD, 經建會).
October 29, 2013, 12:22 am TWN
The overall monitoring indicator has flashed the “yellow-blue” signal for the past three months, and the CEPD stressed that the economy still lacks recovery momentum.
Among the nine components, customs-cleared exports and the index of producer's shipment for manufacturing each lost one point and changed its individual light signal from "yellow-blue" to "blue" (representing sluggish). Imports of machinery and electrical equipment gained one point to change its individual light signal from “yellow-blue” to “green” (representing stable). The light signals for the rest of six components remained unchanged.
According to the CEPD's report, economies of developed countries have gradually recovered, and the eurozone is expected to emerge from recession starting in the fourth quarter. The year-end Christmas shopping season in western countries is likely to aid Taiwan's exports in the remainder of the year.
However, the U.S.'s debt ceiling and federal budget issues have not been completely resolved, and they pose the biggest uncertainty to the global economy in the short-term, the report said.
In terms of domestic demand, investments in high-end semiconductor manufacturing facilities and equipment and the first-stage launch of the Free Economic Pilot Zone are expected to generate private investment momentum, the CPPD said.
New mobile devices due to be rolled out as well as annual sales held in department stores are expected to drive private consumption in the remainder of the year. However, recent food safety scandals may hurt consumption and the extent of their impact is still uncertain at this point.
All in all, the CEPD said, the recovery momentum is not as strong as hoped, and export expansion and consumer confidence enhancement are the keys in helping Taiwan boost economic growth.
With revised data, the composite leading index stood at 103.57, up 0.45 percent from August 2013. Its trend-adjusted index increased by 0.33 percent to 101.21. Among the seven indicators making up the trend-adjusted index, building permits, the index of export orders, net accession rate of employees on payrolls of industry and services, real monetary aggregates M1B, and TAIEX average closing price had positive cyclical movements from the previous month, while SEMI book-to-bill ratio and the TIER manufacturing sector composite indicator had negative cyclical movements.
With revised data, the coincident index stood at 101.26, up by 0.13 percent from August 2013. Its trend-adjusted index increased by 0.01 percent to 98.95.
Among the seven indicators making up the trend-adjusted index, the index of producer's shipment for manufacturing and the industrial production index had positive cyclical movements from the previous month, while nonagricultural employment, real machineries and electrical equipments imports, real customs-cleared exports, electric power consumption, and sales of trade and food services had negative cyclical movements.