Taiwan’s economic indicator flashed consecutive blue in May, yet the annualized 6-month change in the composite leading index turned positive for the first time in 16 months to 3.5%, implying the end of economic contraction, according to the Council for Economic Planning and Development (CEPD).

In the same month the coincident indicator, used to assess economic climate in a given month, showed the fourth consecutive rise to 2.8%, despite the percentage being minus 23.2% in January of the year.

Thanks to the rallying stock market and sharp annual growth in the money supply-M1B, the composite scores in May gained one more point to 12, the highest in seven months.

Hu Chung-yin, deputy chairman of CEPD, indicated that currently Taiwan’s economy is slowly regaining strength, but has not recovered yet. He emphasized that the graph of the economic recovery is “U” shaped not “V,” and predicted the island’s economy would not start to recover until the fourth quarter of this year or the first quarter of next year.