Taipei: Taiwan's economy displayed signs of moderation in January as the index measuring the economic climate indicated a yellow-red light, suggesting a warming economy. This marks a shift from December's red light, which pointed to an overheated economy, as per data released by the National Development Council (NDC) on Thursday. The composite index of economic indicators dropped four points to 34, moving into the yellow-red range of 32 to 37, from December's 38, which was the highest in four months.
According to Focus Taiwan, the NDC had observed a red light in December 2024, a month that joined June and August in indicating an overheated economy. The NDC evaluates Taiwan's economic performance using a five-color system: blue for contraction, yellow-blue for sluggishness, green for stable growth, yellow-red for moderate heating, and red for overheating.
Within the nine components of January's composite index, the subindex for merchandise exports showed a red light, an increase from the previous month's yellow-red. Conversely, the subindex for money supply fell to a blue light from yellow-blue. Additionally, the subindex for manufacturing sector sales turned green, down from red, and the subindex for retail, wholesale, and food and beverage revenues shifted to yellow-blue from yellow-red.
Five other elements of the composite index, including stock price changes and industrial production, remained stable, according to the NDC. Chen Mei-chu, deputy head of the NDC's Department of Economic Development, mentioned that seasonal adjustments to the composite index could not entirely negate the Lunar New Year holiday's impact in January. As such, she suggested that January and February data combined would offer a clearer economic picture.
In January, the trend-adjusted index of leading indicators, which forecasts the economic outlook for the next six months, rose by 0.32 percent to 102.37. The coincident indicators index, which reflects the current economic condition, increased by 0.20 percent to 104.28. These rises indicate moderate growth in Taiwan's domestic economy, Chen noted.