Taipei, Aug. 27 (CNA) Taiwan's economy continued to be affected by the global recession in July, government indicators showed Monday. The composite index of monitoring indicators rose to 16 in July from 15 for the previous month, according to data compiled by the Cabinet-level Council for Economic Planning and Development. The index has a scale of between nine and 45, with the lowest range -- nine to 16 -- represented by a blue light.
The council uses a five-color system to describe the state of the economy, with red, yellow-red, green, yellow-blue and blue representing overheated, warm, stable, cool and sluggish, respectively.
The share markets in major economies around the world were more stable in August, which helped prevent the global outlook from deteriorating, the council said.
However, because of the lingering European debt crisis and the slowdown in growth in the United States and China, it is still unlikely that the situation will improve in the short term, it said.
Although July flashed a blue light for the ninth consecutive month, it is not expected to have a significant impact on Taiwan's stock market, which has already hit its lowest ebb, said Wu Wun-tong, chief investment officer of Capital Investment Trust Corp. Wu predicted that the country's economy will improve gradually in the second half of the year. Edward H. Chow, a professor from the Department of Financial Management at National Chenchi University (NCCU) echoed Wu's views about the positive economic growth. He encouraged companies and individuals to make financial plans for the future in anticipation of an economic recovery. Resolutions of the U.S. beef imports dispute, along with a proposed capital gains tax and the warming cross-Taiwan Strait relations were additional advantages for domestic economic growth, Chow said. However, instead of supporting certain favored industries, the government should provide flexible regulations and build up a fair competitive environment to help the economy to recover, he said. The economy will bounce back more quickly if there is less government interference, he said. (Lin Meng-rui, Lin Hui-chung, Chang Chien-chung and Maia Huang)