Taiwan's Economic Monitor Flashes 4th Consecutive Green in May, Indicating Continued Stability

Taiwan's economic monitoring indicator flashed another green light in May--its fourth monthly green--while its composite score tumbled five points from April, to 24 points.

C. L. Chen, deputy minister of the National Development Council (NDC), attributes the sharp fall in the score to the lackluster performance of external trade. He indicates that among the nine factors that make up the economic monitoring indicator, four posted a downturn in May, with machinery and electrical equipment imports declining by two points and the monitor turning yellow-blue from yellow-red; while stock prices, exports, and the sales index of wholesale, and retail & food services each dropped one point.

NDC uses a five-color economic performance gauge: blue for recession, yellow-blue for slowdown, green for a stable economy, yellow-red for a warming economy, and red for overheating.

Also in May the leading index, which forecasts the economic outlook for the next three months, inched down by 0.18% from a month earlier to 100.44 and the coincident index, which is used to assess the economic climate in a given month, edged up 0.1% to 100.87.

Nevertheless, numerous domestic forecasting institutions have recently adjusted their predictions for Taiwan's economic growth for 2014 upward, to above 3%, indicating an improvement over last year.

Further, the island's consumer confidence index (CCI) climbed 1.99 points in June to hit a record high of 87.58, according to National Central University's Research Center for Taiwan Economic Development.

Five of the CCI's six sub-indices rose in June. The largest increase was in the sub-index for projected stock market investment over the next six months, which went up 5.5 to 97.2 points, while the sub-index for the overall domestic economic outlook grew to 81.8. The only sub-index to show a decline was confidence in buying durable goods, which inching down 0.25 points to 108.6. (JL)