Trade surplus could hit lowest level since 1983

Taiwan's trade surplus for the year may slump to US$5 billion, the lowest level in more than two decades, the Ministry of Finance said yesterday.

The figure will be second only to the US$4.8 billion recorded in 1983, which was followed by a jump to US$8.5 billion in 1984, Hsu Kuo-chung (許國忠), director of the ministry's department of statistics, said at a press briefing.

According to the ministry's latest statistics, exports last month rose 10.7 percent year-on-year to US$17.17 billion, the second-highest level ever.

Imports expanded 5.5 percent to US$15.76 billion, the fifth-highest level in history.

A trade surplus of US$1.41 billion was recorded last month, making it the fifth consecutive month showing a trade surplus, Hsu said.

Exports of machinery and electrical equipment continued to be the No. 1 contributor to trade last month, making up 49.1 percent of total exports at US$8.43 billion.

The accumulated trade surplus from January until the end of last month stood at US$4.87 billion, down 32.7 percent from a year ago.

Adopting a conservative attitude, Hsu said this month might see a marginal trade surplus of US$100 million with exports reaching US$16.6 billion, although a trade deficit of less than US$100 million is possible if shipments of crude oil arrive this month, instead of next month.

"Market demand for the Christmas and New Year holidays has been reflected in exports in October and November," he said, which would make more robust exports for this month unlikely.

Citing forecasts released by Global Insight Inc last month, Hsu said the global economic growth rate this year is expected to decrease from last year's 4 percent to 3.4 percent, with continued growth expected for next year. Global Insight is a forecasting company based in Waltham, Massachusetts.

The nation's foreign trade is expected to maintain moderate expansion in the coming year, as global oil prices have stabilized slightly, and the local information-technology sector is expected to continue expanding.

Hsu cautioned on factors such as the avian flu, the US Federal Reserve's plans to hike interest rates and the appreciation margin of the Chinese yuan.