Taipei, June 27 (CNA) Taiwan's overall economic monitoring indicator flashed green in May for the third consecutive month, indicating stable growth of the domestic economy, according to the latest report released by the National Development Council (NDC) on Monday.
The composite index of monitoring indicators, which reflects the current economic situation, remained unchanged from the previous month at 28, according to data from the NDC, Taiwan's top economic planning body.
It was the third consecutive month that the index remained in the green light zone, which ranges from 23 to 31, the NDC said.
The NDC uses a five-color coded system to gauge the country's economic performance, with blue indicating economic contraction, yellow-blue representing sluggishness, green signifying stable growth, yellow-red signaling a warming economy, and red pointing to an overheated or booming economy.
Among the composite index's nine components, the sub-index for revenue posted by the retail, wholesale, and food and beverage sectors gained two points, changing from green to red, the NDC data showed.
Meanwhile, the sub-indexes for manufacturing performance and business sentiment among manufacturers each fell one point, moving from green to yellow-blue and from yellow-blue to blue, respectively, according to the data.
The NDC attributed the drop to the effects of China's COVID-19 epidemic prevention and control measures, the Russia-Ukraine war, and rising global inflationary pressures, which it said have dampened global economic growth and trade, as well as business confidence.
The indicators for the other six components of the composite index remained unchanged in May from a month earlier, according to the data.
The trend-adjusted leading index, which gauges the economic climate over the next six months, moved lower in May for the seventh consecutive month, while the coincident index fell for the fourth straight month, indicating a slowdown of economic expansion, the NDC said.
Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said the Organization for Economic Co-operation and Development (OECD) has lowered its 2022 global economic growth forecast from 4.46 percent to 3 percent, cutting its projections sharply for the world's two largest economies -- the United States and China.
The OECD cut its 2022 growth forecast for the United States from 3.7 percent to 2.5 percent and for China from 5.1 percent to 4.4 percent, Wu said.
Meanwhile, the leading indexes in major countries and territories other than the U.S. and China have all showed decline, which means that although Taiwan's exports remain robust, its economy is facing critical challenges due to uncontrollable international factors, she said.
For instance, China's COVID-19 restrictions have affected Taiwan's performance in the global supply chain, Wu said.
She also cited other factors that could pose huge challenges to Taiwan's exports, including global inflationary pressure caused by rising energy prices amid the Russia-Ukraine war, which she said has dampened demand.
On the upside, domestic demand is expected to rise in July and August thanks to the arrival of schools' summer vacation and stimulus measures taken by the government, Wu said, expressing confidence that Taiwan's economic monitoring indicator will continue to flash a green light in the second half of the year.