TAIPEI (Taiwan News) — Taiwan’s National Development Council (NDC) released a “yellow-red” business climate indicator signal for April, showing signs of improved business activity and economic performance.
The NDC had issued a “green” light indicator for the previous three months, reflecting “stable” economic performance. April's indicator increased four points from the previous month, reaching 35 points, which is a high not experienced since February 2022, indicating the economy is “transitioning” toward growth, per UDN.
Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said the improved business climate is driven by AI, lifting demand for IT exports along with audio-visual equipment.
Among the nine sub-indexes for economic performance, retail, wholesale, food-beverage sales, and imports of machinery and electric equipment all moved higher by two points, going from “green” to “red” in April. Additionally, the sub-index for industrial production and manufacturing rose by one point, though the sub-index for customs clearance dropped by two points.
Wu said the overall economic indicator has risen for seven consecutive months, representing a stable economic recovery. Looking forward, Wu said a rebound in the global commodities trade and business opportunities in AI will lead to steady export growth.
In terms of investment, Wu said businesses will allocate more funds to maintain technological leadership through R&D and process improvement, as well as compliance with government-mandated net-zero regulations. Furthermore, Wu said more government funds are expected in public construction, further spurring investment momentum.
In terms of domestic demand, Wu said a stable job market will lead to an increase in basic wages and spur stock market transactions. Government efforts to reduce the burdens of citizens concerning transportation, housing, and schooling could increase disposable income and sustain consumption momentum.
Wu said external factors could affect Taiwan’s economy, such as interest rate cuts in leading countries, continued geopolitical risks, and intensifying trade competition between the U.S. and China. For these reasons, Wu said close attention should be paid to macroeconomic factors.