The large contraction in Taiwan's trade surplus in the first five months of this year is a short-term phenomenon, and to correct the trend Taiwan must find new markets for exports, a Bureau of Foreign Trade (BOFT) spokesman said yesterday.
The bureau has been working to find ways raise the competitiveness of Taiwan's goods in the international market, the official said, attributing the large decrease in the January-May trade surplus mainly to skyrocketing oil prices and the growth in machinery imports, including airplanes and high-speed railway train cars.
Foreign trade for the first five months of the year reached US$149.07 billion, up 10.5 percent year on year, BOFT tallies show. Exports and imports amounted to US$74.81 billion and US$74.26 billion, respectively, leaving the country with a trade surplus of US$550 million, down US$3.55 billion, or nearly 86.6 percent, compared to the previous year.
The BOFT expects the trade surplus to shrink to an estimated US$4.25 billion this year after Taiwan registered a trade surplus of US$6.12 billion last year.
With a continued rise in the international crude oil prices, a recent hike in US interest rates and China's continued macro-economic adjustments, growth in foreign trade will slow this year, the BOFT official said.
The official said Taiwan's export growth for this year is forecast at 9.77 percent, with import growth expected to reach 11.24 percent.
Commenting on the trade deficits recorded for January and March, the official said it is better for a country's exports and imports to grow simultaneously for balanced development.
He said there is no need to worry about short-term deficits as Taiwan's foreign exchange reserves are large and export orders have posted successive highs over the long term.
The key task now is to sharpen the competitive edge of Taiwan's products and to seek to join free trade zones or ink trade accords with other countries, he said, pointing out that overseas market exploration efforts have focused on Japan and South Korea, with which Taiwan has the highest trade deficits.
According to the Council for Economic Planning and Development (CEPD), world oil prices will be the major variable affecting Taiwan's economy.
But CEPD officials said they are confident Taiwan's trade surplus for the second half of this year will rise and predicted that the trade deficit will drop in the coming months.
The officials also expressed optimism about an economic upturn in the coming six months, as they expect the approval of the NT$90.5 billion (US$2.83 billion) budget for the 10 New Development Projects and the expected passage of the NT$80 billion budget for flood-control projects to help lift the domestic economy.
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