Fri, Nov 21, 2003 - Page 11 News List

Current-account surplus widens 38 percent in Q3

GOODS AND CAPITAL The NT dollar may appreciate as the nation exports more and foreigners buy more Taiwanese stocks, threatening the export-led recovery

BLOOMBERG

The current-account surplus widened 38 percent in the third quarter as exports surged and overseas investors bought more of the nation's stocks.

The surplus, the broadest measure of the flow of goods, services and money in and out of Taiwan, widened to US$6.94 billion from US$5.04 billion a year earlier, the central bank said in a statement yesterday.

A widening current-account surplus may cause the New Taiwan dollar to appreciate, making the nation's products more expensive overseas and derailing an export-led economic recovery.

During the first 10 months, exports rose 8.7 percent to US$116.4 billion, while imports grew 9 percent to US$101.7 billion, the Ministry of Finance reported earlier this month. The government predicts exports, which account for about half of the economy, will grow 9.3 percent this year.

The New Taiwan dollar gained 1.8 percent to 34.002 per US dollar in the past six months. The central bank said last month it will pursue a "managed float" of the local currency to keep it stable against the units of its main trading partners.

The trade surplus widened 53 percent to US$7.28 billion in the third quarter.

The surplus on the financial account, which measures investment flows, widened to US$5.15 billion from US$3.02 billion, the central bank said.

The TAIEX had a second quarterly gain in the third quarter, as foreign investors moved funds into stocks, attracted by a worldwide recovery in demand for notebook computers, mobile phones and digital cameras that's lifting earnings at Taiwanese electronics makers.

The income surplus, which tracks investment earnings, fell 19 percent to US$1.62 billion, the bank said. The deficit on the services account, which measures travel and transport costs, widened to 12 percent to US$1.2 billion.

The capital-account deficit narrowed to US$21 million from US$28 million, the central bank said.

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