Taiwan's business climate indicator continued to flash "red" in September, reflecting an overheating economy for eight months in a row, driven by rising consumption amid a post-COVID-19 economic recovery, the National Development Council (NDC) reported on Wednesday.
Although the gauge slid by one point to 38, the lowest value in the red light zone of 38-45, the NDC said it remains confident about the country's economy in the fourth quarter, due to the economic stimulus vouchers doled out by the government and the arrival of the traditional shopping peak season.
The loss of one point in September's composite indicator was mainly because of a higher comparison base since the second half of last year, resulting in a slower growth rate in the second half of this month, said Wu Ming-huei (???), director of the NDC's Economic Development Department.
However, uncertainties that might arise from the development of the COVID-19 pandemic and related supply chains must be closely monitored, said Wu.
Wu also played down the possibility that inflation could hurt Taiwan's economic performance, saying that the recent appreciation of the local currency could help offset the pressure brought on by the rising prices of imported goods.
At the same time, the index of leading indicators, which seeks to predict the economic situation in the next six months, continued to rise 0.29 percent from August to 102.15, while the index of coincident indicators, which reflects the current economic situation, fell 0.24 percent to 101.55, signaling that the impact of the pandemic has eased.
The NDC uses a five-color system to gauge the nation's economic performance, with "red" indicating overheating, "yellow-red" referring to a warming economy, "green" signaling steady growth, "yellow-blue" representing sluggishness, and "blue" suggesting a recession.
Source: Focus Taiwan News Channel