A key gauge of Taiwan's economic health showed that the island's economy improved slightly in September, although its economic outlook still faces many uncertainties, local authorities said on Friday.

The composite index of monitoring indicators rose to 22 in September, seven points higher than in the previous month, according to the island's Council for Economic Planning and Development (CEPD).

The CEPD said the island's economy may slowly shed its sluggishness, citing improvements in employment, the financial industry, production, trade and consumption.

However, it also warned that the island's economy still faces many uncertainties, given the potential risks of the European sovereign debt crisis, the so-called "fiscal cliff" in the United States and slowing emerging economies.

It added that internal demand also faces downside risks, as consumers have little confidence, real wages have failed to grow and the stock market has shown no major improvements in volume or momentum.

It said economy-boosting measures taken by the island's authorities are expected to have a positive impact.