Last month Taiwan saw its third monthly trade deficit this year, after January and March, as lingering high oil and raw materials prices impacted negatively on exports and also drove import-and-export growth rates to new lows, according to government statistics released yesterday.
Exports grew 3.1 percent to US$14.88 billion, and imports rose 2.5 percent to US$15 billion last month from a year ago, the slowest pace since June 2003 and August 2003 respectively, the Ministry of Finance said in a report.
"The negative impact from higher oil prices has just started [to show] and the situation doesn't look good," said Daniel Chen, senior vice president for economic research at Taipei Fubon Commercial Bank Co (台北富邦銀行).
"In the second half, we might see the trade surplus getting smaller, or even a trade deficit, like last month," he said.
The benchmark New York light sweet crude price has jumped 42 percent this year and reached a record US$62.10 a barrel yesterday.
In the first half of the year exports reached US$89.68 billion, a 6.8 percent increase from a year ago, and imports grew by 11.5 percent to US$89.26 billion, marking a trade-surplus decrease of US$3.47 billion, or 89.1 percent, to US$420 million, the ministry said.
After translating the figures into New Taiwan dollar, however, exports declined by 3.9 percent to NT$465.68 billion, while imports decreased by 4.5 percent to NT$470.92 billion from the same period last year, illustrating the drastic appreciation of the local currency.
Hsu Kuo-chung (許國忠), head of the ministry's statistics department, said the recent depreciation of the NT dollar will benefit Taiwan's export sector, but the effect depends on how long the currency stays at the current
level or move lower. As the US economy is recovering, there is still room for Asian currencies to go down, Hsu said.
In terms of destination, Taiwan's exports to major trade partners including China and Japan increased slightly, by 7.1 percent and 7.5 percent respectively, the statistics showed. Exports and imports to the US, Taiwan's second-largest overseas market, dropped by 2.5 percent and 4.8 percent, the report said. Shipments of machinery and electronics equipment, which represent the biggest share of Taiwan's exports at 46.4 percent, declined by 1.2 percent from last year to US$6.9 billion last month, according to the report.
Among the figures, information technology and telecommunications products saw the largest decline, dropping by 25.1 percent to US$775 million last
month after sliding 24 percent in May, the report said.
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