Taiwan's economy monitoring indicator signaling robust 'green light' in Oct.

Taipei, Dec. 1, 2003 (CENS)—The October monitoring indicator for Taiwan's economic performance flashed a 'green light' for the fourth consecutive month in October, according to the Cabinet-level Council for Economic Planning and Development (CEPD).

In the same month the composite index for the economic performance reached 31 points, hitting the ceiling of the ‘green light' score, and the score was the highest since February 2000. CEPD indicated that the ‘green light' is very likely to turn ‘yellow-red' in November if Taiwan's economic climate keeps warming.

Hu Chung-yin, director of CEPD's economic research department, said that among the nine components constituting the monitoring indicator in October, both the stock price index and the industrial production index rose significantly. Both indexes gained one more point in their scores for the month, causing the monitoring indicator for stock price turn from "yellow-red" to "red" and that for industrial production turn "yellow-red" from "green." The two extra points scored by the two sectors boosted the total composite index to 31 points in October from September's 29 points.

In October the leading economic indicator, which is designed to gauge the economic performance in the next three to six months, stood at 103.7 points, up 1.7% from a month earlier, and the score was a new high in the past three years; while the coincident indicator posted at 106 points, up 1.2% for the fifth consecutive monthly rise.

Hu pointed out that the monitoring indicator would turn ‘yellow-red' in November if the market demand keeps rising for the coming Christmas holiday and the inventory rate of the domestic manufacturing industries continues declining.

However, Hu will not rule out possible changes caused by any factors that will influence the island's business trend. Among the factors are the rising protectionism on international trade particularly among large traders such as European Union, the United States, and mainland China; the revival of international terrorism; and the uncertain economic climate in the U.S.

Besides, the unpredictable relationship between the two sides of the Taiwan Strait and growing political conflicts between parties on the island along with the approaching of the presidential election will more or less affect Taiwan's economic performance.