July eco­nomic in­di­ca­tor flashes third blue light this year: NDC

The China Post - - LOCAL - BY STEPHANIE CHAO

The Na­tional De­vel­op­ment Coun­cil’s (NDC, ) eco­nomic mon­i­tor­ing in­di­ca­tor fell two points to an over­all score of 14 in July, flash­ing blue to sig­nify a de­cline, be­com­ing the third blue in­di­ca­tor this year.

Ac­cord­ing to the sta­tis­tics pro­vided yesterday by the Min­istry of Fi­nance, last month’s ex­ported goods, in­dus­trial pro­duc­tion in­dex and busi­ness turnover did not per­form well, com­pared with the same pe­riod last year.

The NDC uses a five-color spec­trum to sig­nal na­tional eco­nomic health. Red warns of over­heat­ing and yel­low-red of slight over­heat­ing. Green, yel­low-blue and blue sig­nal steady growth, slow­down and de­cline, re­spec­tively.

Do­mes­tic de­mands for elec­tri­cal equip­ment parts de­clined and a grad­ual con­ser­va­tive at­ti­tude among in­vestors were among the fac­tors for the July declines. An up­turn would be­come ap­par­ent in the fourth quar­ter, the coun­cil sug­gested.

Nine Com­po­nents

The NDC bases its eco­nomic mon­i­tor­ing in­di­ca­tor on nine com­po­nents.

Sub-in­dices for mon­e­tary ag­gre- gates of M1B and TAIEX av­er­age clos­ing prices in July changed from a healthy green to yel­low-blue lights, with each los­ing one point. Other com­po­nents re­main un­changed, though the lead­ing and re­lated in­di­ca­tors show a con­tin­ual de­cline.

How­ever, Wu Ming-huei ( ), di­rec­tor of the NDC’s Eco­nomic De­vel­op­ment Depart­ment, stated that both the Global In­sight Inc., (GI), the Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics ( DGBAS,

) hold an op­ti­mistic view for the fourth quar­ter.

Ac­cord­ing to Wu, the U.S. and Euro­pean economies are still ex- pand­ing, though the Pur­chas­ing Man­agers’ In­dex (PMI) was slashed down in main­land China, show­ing a shrink­ing eco­nomic state, and will be­come a ma­jor in­flu­enc­ing fac­tor for Tai­wan’s ex­ports.

The new launches of mo­bile de­vices in the later half of the year and hol­i­day busi­ness in Europe and the U.S. will cre­ate a “pos­i­tive ef­fect” on global ex­ports, Wu stated.

Wage growth will also see a sta­ble in­crease, as con­sumer power in Tai­wan is still preva­lent, Wu said. In­vest­ments in the semi­con­duc­tor in­dus­try main­tain a two-digit growth as well.

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