Taiwan’s economy stays in contraction for 6th straight month in April

Taipei, May perhaps 26 (CNA) Taiwan’s economy remained in contraction mode for the sixth consecutive month in April as weakening international demand continued to weigh on the country’s exports, the National Improvement Council (NDC) mentioned Friday.

The NDC mentioned its composite index of financial indicators remained unchanged in April at 11 but stayed in the “blue” variety of 9-16 on the Cabinet-level council’s 5-tier method, with blue indicating financial contraction, yellow-blue representing sluggishness, green signifying steady development, yellow-red referring to a warming economy, and red pointing to an overheated or booming economy.

Speaking with reporters, Wu Ming-hui (吳明蕙), head of the NDC’s Division of Financial Improvement, mentioned aspects in the April composite index such as production, exports, cash provide and business enterprise sentiment remained weak.

Domestic demand appeared fairly robust, with retail sales and income posted by the meals and beverage market expanding in a steady manner, which offset the effect resulting from a fall in outbound sales, Wu mentioned.

In April, Taiwan’s exports and export orders each fell for an eighth consecutive month, falling 13.three % and 18.1 %, respectively, from a year earlier amid inventory adjustments in each tech and old economy sectors.

Amongst the nine aspects in the composite index, the subindex on nonfarm payrolls rose a single point from a month earlier, whilst the subindex on business enterprise sentiment in the neighborhood manufacturing sector fell a single point, the NDC mentioned.

The subindexes on other seven aspects such as cash provide, merchandise exports, and industrial production remained unchanged more than April, the NDC added.

In spite of the composite index’s muted functionality, the NDC’s top financial indicators, which gauge the financial climate more than the subsequent six months, moved larger for the sixth month in a row in April, albeit at a decreased pace.

In April, the top indicators rose .13 % from a month earlier, down from March’s .23 % enhance and the smallest month-to-month enhance for six months, the NDC’s information indicated.

In the six-month period, the top indicators rose two.26 %, according to the NDC.

Wu mentioned the slower development in the April top indicators showed that neighborhood financial development momentum remained insufficient to have a comeback as a fall in international demand continued to hurt Taiwan’s exports, which serve as the backbone of the country’s economy.

Wu mentioned it was tough to predict when the neighborhood economy would enter the yellow-blue variety on the NDC’s grading method, as a fragile globe continued to push down demand.

Only when exports bounce back, production and sales of neighborhood firms will get a increase, accordingly, Wu mentioned.

In addition, the industry for customer electronics gadgets such as phones and notebook computer systems stayed fragile, a important departure from robust sales boosted by demands designed by function from house and remote studying in the COVID-19 pandemic era, Wu mentioned, adding it demands some time to digest inventories ahead of production picks up.

“The neighborhood economy’s consolidation continues and there is no instant sign of a turnaround,” Wu mentioned. “But, Taiwan could have a much better second half than the very first on the back of a fairly low comparison base more than the similar period of final year.”

The NDC mentioned whilst the international financial slowdown will hold affecting Taiwan’s exports, demand for emerging technologies such as higher-functionality computing devices, information centers, and artificial intelligence is anticipated to enable the country’s outbound sales.

The NDC added the government’s efforts to push for green power improvement and public function projects are anticipated to deliver assistance to the neighborhood economy.

(By Hsieh Fang-wu and Frances Huang)

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