TAIPEI (Taiwan News) – The leading economic indicator flashed a red light for the sixth straight month in May, representing an overheating economy, the National Development Council said Friday.
According to Taiwan’s system, blue stands for contraction, while yellow-blue represents sluggishness, green indicates stable growth, yellow-red stands for a warming economy, and red means the economy is booming or overheating. The composite index fell one point from April to 39, per UDN.
Investments and orders continued to rise, ensuring “moderate growth” for the economy during the first half of 2026, the NDC said. A decline to a yellow-red level of 38 points or less is only likely during the second half of the year, though the economy is on a stable growth path.
Of the nine index components, the one for money supply was the only one to rise, up from the green level to yellow-red. The subindex for overtime hours in industry and services declined from yellow-red to green, while manufacturing sales fell from red to yellow-red.
Further advances in AI technology and expanding capital expenditure on cloud services are likely to continue fueling Taiwan’s exports, UDN reported. The NDC also expects AI and semiconductor investments to continue at a brisk pace, while salary hikes stock market profits, and government subsidies for travel favor consumption, according to the NDC.
