TAIPEI - The National Development Council's (NDC) economic monitoring indicator flashed a "green" signal in June, representing a stable economy for the fifth month in a row.
While leading indicators showed decline in June, coincident indicators showed growth, indicating a "moderate growth" for the domestic economy, according to a report released by the NDC yesterday.
The economic monitoring score went up 2 points from last month to reach 26 in June. Among the components that make up the monitoring indicator, two changed lights between May and June.
The signal of TAIEX Average Closing Price, or simply stock index, moved from "green" to "yellow-red" (representing a transitional economy from stable to overheated).
The signal of Imports of Machinery and Electrical Equipment moved from "yellow-blue" (representing a transitional economy from sluggish to stable) to "green."
Light signals of the other components remained unchanged. Since six out of the nine components flashed a "green" or "yellow-red" signal, showing that Taiwan's economy is on track for stable recovery, the NDC is "cautiously optimistic" about Taiwan's economic performance in the latter half of 2014, said NDC Deputy Minister Chen Chien-liang (陳建良).
Telecommunication companies launching 4G wireless services will promote private investment. The booming stock market will also add wealth to the private sector and spur consumption, the NDC said.
Risk Factors in the Second Half of 2014
"In regards to the performance of various areas, whether it is exports, the job market, unemployment rate or consumer confidence scores, they all showed positive development," Chen said.
However, risk factors that may affect Taiwan's economy do exist. For one, growth of emerging economies already showed signs of weakness, Chen said, adding that there is also a concern about China's real estate bubble.
In addition, geopolitical crises such as conflicts in Ukraine and Gaza in the Middle East have also emerged, which may cause fluctuations in international crude oil prices.
While it is hard to grasp and control risk factors from abroad, there are things in Taiwan that deserve urgent attention, Chen said. As the economic recovery trend continues around the globe, it is crucial for Taiwan to take the opportunity to further open up to realise a more liberalized economy that is in alignment with the global economy.
To achieve this, Taiwan must ready itself by rolling out accompanying measures. "Our neighbouring countries will not wait for us, and the 'green' signal will not keep flashing," Chen warned.
A more liberalized economy is a consensus reached in the recently held National Conference on Economic and Trade Affairs, Chen said. However, how to open up, where to open up, with what speed, and how to assist disadvantaged industries, all deserve careful deliberation, Chen said.