Taipei, Aug. 28 (CNA) The local economy flashed a yellow-blue light for the fourth consecutive month in July, signaling sluggish growth, the National Development Council (NDC) said Monday.

The NDC said the composite index of monitoring indicators totaled 22 in July, unchanged from a month earlier. That was one point shy of the level needed to flash a green light, which would suggest stable growth.

Because the index again reached the top of the yellow-blue range, the NDC said it remained cautiously optimistic about Taiwan's economy.

Wu Ming-hui (吳明蕙), head of the NDC's Department of Economic Development, said that with the economy on the road to recovery, it is possible that the composite index of monitoring indicators will flash a green light in the third quarter of the year.

The council was also cautiously upbeat, Wu said, because July's leading indicators, which offer some idea of Taiwan's future economic climate, rose for the second consecutive month.

In July, the leading indicators rose 0.18 percent from a month earlier to 101.08, according to the NDC.

Wu said Taiwan's economy is expected to benefit from the global economy's stable pace of recovery in the second half, as the country's exports are likely to be boosted by solid global demand, in particular for mobile devices and gadgets used in the Internet of Things.

She said the planned expansion of semiconductor capacity in Taiwan is expected to lead to an increase in private investment, while private consumption could be helped by better economic fundamentals.

The council uses a five-color system to gauge the country's economic performance, with blue indicating economic recession, yellow-blue representing economic sluggishness, green denoting stable growth, yellow-red referring to a warming economy and red pointing to economic overheating.

The composite monitoring index is comprised of nine factors.

For July, the sub-indexes for money supply, industrial production, non-farm payroll, exports, revenue posted by the manufacturing sector and sales registered by the retail/wholesale/food and beverage sector continued to flash a yellow-blue light, the NDC said.

The sub-indexes for machinery and electrical equipment imports and manufacturing sentiment flashed a green light, while the sub-index for stock market volatility outperformed the other eight factors.

The strong showing of the stock market index reflected the market's close above 10,000 points in mid-May for the first time in 17 years and its continued rise because of heavy foreign institutional buying.

On Monday, the weighted index closed up 0.10 percent, at 10,525.98, marking the 69th consecutive session in which the index closed above the 10,000-point level, the longest such run ever. 

(By Yang Shu-min and Frances Huang)
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