Seoul [South Korea], July 29 : Taiwan's economy continued to show a "green light", reflecting a stable growth in June, according to a report released by the National Development Council (NDC), as reported by Focus Taiwan.

The council's composite index of economic indicators dropped by two points to 29, the lowest since February 2024, but still within the "green light" range, which signals moderate and stable growth.

The NDC uses a five-colour system to track economic performance: red for overheating, yellow-red for an improving economy, green for stability, yellow-blue for sluggishness, and blue for recession.

In June, overtime hours in the industrial and service sectors shifted from yellow-red to green. The wholesale and food and beverage industries also showed signs of slowing, falling from green to yellow-blue, largely because of delays in importing vehicles.

Out of nine indicators in the composite index, four--including industrial production, merchandise exports, imports of machinery and electronic equipment- remained in the red, while sub-indexes like money supply and business sentiment indicators stayed blue, reflecting continued weakness. Stock price changes continued to signal yellow-blue.

Despite a declining leading index, the coincident index rose for the 26th straight month, suggesting stable current conditions.

Chen Mei-chu, deputy head of the NDC's Department of Economic Development, noted that this was due mainly to companies taking a wait-and-see approach amid uncertainty over international tariff policies and a slowdown in shipments from Taiwan's industrial sector.

He added that, "Taiwan's economic outlook for the second half of the year remains uncertain, with the Aug. 1 deadline for the implementation of higher U.S. tariffs approaching."

Taiwan Semiconductor Manufacturing Co. (TSMC) is maintaining a global edge with its 2nm technology, set to begin mass production later this year, potentially boosting exports. While demand for traditional products has softened, AI continues to drive export growth.

Chen further added that while demand for old-economy products has softened, AI continues to be a key driver of Taiwan's exports and economic growth.

In addition, international forecasting institutions have slightly raised their global economic growth outlook, amid the U.S.' impending increase in "reciprocal" tariffs on several countries, she said.