Exports are up, but trade surplus plunges by 90%

Taiwan's exports climbed to their third-largest high last month primarily due to exuberant demand for liquid-crystal-display (LCD) panels and microprocessors made by local companies, a government official said yesterday.

"The expansion is driven by rising demand for Taiwan's electronic products such as chips and flat screens," said Hsu Kuo-chung (許國忠), head of the statistics department of the Ministry of Finance in a phone interview.

Shipments climbed 11.2 percent to US$15.64 billion last month, compared to US$14.07 billion from a year ago, after hitting an all-time high in March, according to the government figures.

The strong growth, however, may not be sustainable, Hsu said.

"It will be good enough to see annual growth as high as 8 percent in May because of a higher base last year," Hsu said, adding that a stabilizing global economy would also impact on the export-oriented economy's performance.

AU Optronics Corp (友達光電), the nation's biggest LCD panel supplier, yesterday said that last month's sales dropped about 7 percent to NT$14.91 billion year on year on lower prices. Shipments of large-sized panels, however, leapt to 2.3 million units from 1.56 million.

Hsu also attributed the nation's robust increase in exports to growing demand from emerging markets including Hong Kong, China and the rest of the ASEAN countries.

Taiwan's exports to China -- including Hong Kong, the nation's biggest export destination -- grew to US$5.83 billion, accounting for nearly 40 percent of the total amount, according to the ministry's figures.

Sales to ASEAN countries increased to US$2.36 billion last month, while those to the US, the world's biggest economy, also rose to US$2.19 billion, the ministry said.

Taiwan's imports also rose to their third-largest high last month at US$15.56 billion, up 18.8 percent from US$13.1 billion during the same period last year, the figures indicated.

The big increase in imports meant that Taiwan's trade surplus plunged 91.3 percent to US$83.9 million last month, which was barely one-tenth of the US$960 million posted a year earlier. Hsu blamed surging oil prices for the drastic decline.

For the full year, the nation's exports are expected to inch up roughly 7 percent to US$185.83 billion this year, compared to US$174.02 billion last year, the Ministry of Economics said in its latest report released yesterday.

"Slowing economic growth abroad and at home is the main reason behind the anemic outlook," said James Wu (吳新華), deputy director of the Bureau of Foreign Trade, in the report.

Imports would increase a mere 8 percent annually to US$182.1 billion from US$167.9 billion, according to the report.

The trade surplus is expected to slide almost 40 percent to US$3.74 billion this year from US$6.13 billion last year.