Trade deficit shrinks on higher exports

The nation's trade deficit last month substantially shrank to US$198.5 million from US$1.12 billion in December as exports picked up steam, the Ministry of Finance reported yesterday.

Exports month rose 29.7 percent to US$15.31 billion from a year ago, while imports surged 46.7 percent to US$15.51 billion, the ministry said in a statement.

"Heavy imports ahead of the Lunar New Year caused the trade deficit in January," said Lucas Lee, an economist at Barits International Securities Corp (倍利證券). "That represents a seasonal spike in domestic consumption and will not persist."

Hsu Kuo-chung (許國忠), the ministry's statistics chief, said the nation's export-oriented economy will continue growing this year, although at a milder pace compared with last year's.

"For the whole year, export growth will slow down because of the slowing global economy, weakening US dollar and the cooling down of China's economy," Hsu said.

In the ministry's latest trade report, the value of shipments to Hong Kong and China amounted to US$5.79 billion last month, accounting for 37.8 percent of the nation's total shipments.

Exports the US were worth US$2.27 billion, or 14.9 percent of the total, while those to Europe came in at US$2.01 billion, or 13.1 percent, with the Association of Southeast Asian Nations taking US$2.07 billion, or 13.5 percent.