Economy

Taiwan's Key Economic Indicators Hit 13-Year Lows

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By Howard Chang/Staś Butler

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The National Development Council's composite index of monitoring indicators has dropped to 12 points — a 13-year low. Consumer confidence in Taiwan has also fallen to its lowest point since 2009.

It’s a warning sign for the economy. Taiwan’s National Development Council says its key measure of economic health has hit a 13-year low. The NDC’s composite index of economic monitoring indicators dropped to 12 in November. That’s the lowest level since June 2009. It marks a shift from what the government calls a “transitional” economy … to a “sluggish” one.

The council’s economic development chief explains. "The main reason for the shift is wholesale. Wholesale has performed relatively poorly. Then there are [Taiwan’s] exports. Demand from overseas has certainly weakened and on top of that manufacturers are adjusting their stock levels so overall, demand is weaker and that has impacted exports, production and sales." And that’s not all: consumer confidence is also slipping.

The National Central University’s index dropped in December — also to a 13-year low. That suggests people are spending less money than before. Researchers say this is partly because of inflation. "Inflation has hit, and Taiwan is no exception. Prices have risen for everything from oyster noodles to bread. When prices rise, consumer confidence drops. Family incomes have fallen too."

"I do not think that the slowdown in Taiwan will actually affect the global economy, but it's more a reflection of what is going on around the world." Government economists say Taiwan is feeling the impact of slowing demand from abroad. But experts expect that demand to pick up again in the middle of next year — and lift Taiwan’s economy with it.