Taipei, Dec. 27 (CNA) Taiwan's index gauging the state of the economy flashed a third consecutive "yellow-red" light in November, signaling a moderately hot economy and a slight improvement from October, according to the National Development Council.
The composite index of economic indicators rose by two points from the previous month to 34, flashing a yellow-red light, which ranges between 32 and 37, the council said in a statement on Friday.
The council uses a five-color system to gauge the country's economic performance, with blue indicating economic contraction, yellow-blue representing sluggishness, green signifying stable growth, yellow-red referring to a moderately hot economy, and red pointing to an overheated economy.
The improvement posted in November was attributed to continuous demand for artificial intelligence (AI) applications, the peak season for exporters, and the improved business experienced by the old economy sectors, the council said.
These factors drove up the subindexes of merchandise exports and manufacturing sector sales and showed that the local economy has maintained its growth momentum, according to the council.
Meanwhile, the council noted that the leading indicators showed a fourth consecutive monthly decline, as six of the seven components, including export orders, net new hiring, new housing construction starts, Taiex average closing price, real monetary aggregates, and the manufacturing composite indicator, trended lower.
Only the real imports of semiconductor equipment continued the monthly increases, sustaining growth over the past six months, according to data released by the council.
The decline in the leading indicators serves as a warning, partly due to concerns over U.S. President-elect Donald Trump's trade and economic policies, but there are no signs of a potential economic downturn, Chiu Chiu-ying (邱秋瑩), head of the council's Department of Economic Development, said at a news briefing.
Looking ahead, major institutions generally forecast growth in global trade, despite the possible impact of the incoming Trump administration's new policies, according to Chiu.
This positive outlook is based on expectations of interest rate cuts and economic stimulus policies to be introduced by major economies, as well as ongoing demand for new AI-related products, Chiu said.
In addition, the private investment in Taiwan, which totaled NT$5.3 trillion (US$161.28 billion) this year, is expected to rise to NT$5.7 trillion in 2025, Chiu said, citing AI and the government's investment in infrastructure as the driving force.
Under these favorable conditions, Chiu projected that Taiwan's economy should experience moderate expansion in 2025.
