Taipei: Taiwan’s economy exhibited signs of moderation in October, as indicated by the latest data from the National Development Council (NDC), which revealed a “yellow-red” light for the country’s economic performance. This classification suggests a moderately hot economy, though the composite index of economic indicators decreased by two points to 32, marking the lowest level since April.
According to Focus Taiwan, the NDC employs a comprehensive five-color system to assess Taiwan’s economic performance. The system includes blue for economic contraction, yellow-blue for sluggishness, green for stable growth, yellow-red for a moderately hot economy, and red for an overheated economy. The current score of 32 is positioned at the lower end of the yellow-red spectrum, indicating some cooling in economic activity.
The NDC highlighted that short-term factors have contributed to the decline in the overall index, despite positive developments in certain sectors of the old economy. Chiu Chiu-ying, Director of the
NDC’s Department of Economic Development, noted that among the nine subindexes, industrial production experienced a shift from a red light to a yellow-red light. Meanwhile, manufacturing sector sales transitioned from a yellow-red to a green light, with the remaining seven subindexes remaining unchanged.
Chiu attributed the dip in industrial production to temporary issues, such as disruptions caused by typhoon days off in early October and planned production line halts in the petrochemical industry. Despite these challenges, Chiu emphasized that the economy still reflects signs of stable recovery, maintaining its yellow-red status.
Chiu further mentioned a temporary decline in exports of high-end artificial intelligence (AI) products, suggesting that the situation should improve as new AI applications are introduced. She anticipates a rebound in the production and export of servers. While the chemistry and petrochemical industries have shown weakness, the basic metal and machinery industries have demonstrat
ed resilience, contributing to a better recovery in the old economy sector compared to September.
Looking ahead, the NDC expressed cautious optimism about the year-end economy, driven by traditional sales peaks during anniversary sales events in department stores and the release of new electronic products. International forecasts indicate that global trade growth is expected to rise in 2025, signaling a continued increase in demand trends.
However, the NDC warned of potential uncertainties stemming from the economic and trade policies of U.S. President-elect Donald Trump and geopolitical conflicts, which may impact Taiwan’s domestic economy. As new technology applications, including AI and high-performance computing, continue to expand, the NDC remains hopeful that export growth will persist.