(Photo: VCG)

Taiwan's economy continued to show signs of sluggishness in August as indicated by the latest index gauging the business climate on the island.

The composite index of monitoring indicators for August continued to flash the "yellow-blue light," dropping two points from July to 20 points, suggesting the economy remained stuck between recession and growth, according to the island's economic planning authorities.

The island's economy has been flashing the yellow-blue light since January 2019 after improving from a contraction in December.

Under Taiwan's five-color system to assess the economy, a blue light (9-16 points) indicates contraction, a yellow-blue light (17-22) means sluggishness, a green light (23-31) signals stable growth, a yellow-red light (32-37) suggests a warming economy and a red light (38-45) points to an overheated economy.

The coincident indicator, which reveals the current economic situation, rose to 100.21 in August, 0.57 percent higher than the previous month.

The leading indicator, which is composed of seven sub-indexes to predict changes in the economy, kept falling for two consecutive months, with a decline by 0.05 percent in August to 101.67.