The disappointing export figures for last month suggest that the recent robust growth in trade may have come to an end amid decelerating demand from major export destinations and weakening imports, Morgan Stanley said yesterday.
"Heightened optimism for the trade sector following the encouraging data for the first two months of this year is meeting with disappointment over the latest trade report for last month," Denise Yam (任永欣), a Morgan Stanley economist who tracks Taiwan's economy, said in a report released yesterday.
"The excitement may be over," Yam said.
Exports totaled US$17.7 billion last month, representing growth of 7.1 percent year-on-year, the slowest since July last year (excluding the Lunar New Year-affected month of January). This represents a significant decline compared with growth of 14 percent year-on-year in the first two months of this year, according to Morgan Stanley's figures.
Exports to major destinations were also disappointing, Yam said, with Taiwan's shipments to the US last month edging up only 0.6 percent from a year earlier, versus a growth rate of 11.5 percent in the first two months of this year. Exports to Europe fell 1.6 percent, in comparison with growth of 7.5 percent in the last two months.
For the first quarter as a whole, exports increased 11.5 percent year-on-year, slowing from a previous growth rate of 14.2 percent, the report said.
Weak imports underlined the weakness in domestic demand, Yam said, with raw material imports, which serve as an indicator for future exports, gained only 5 percent last month from a year ago, down from a 24-percent jump in the two previous months.
Capital goods imports, which can be used to gauge domestic investment sentiment, declined by 16.4 percent year-on-year last month, following a 9.5-percent decline in the two previous months, the economist said.
Morgan Stanley retained its forecast for Taiwan's economic growth for this year at 3.6 percent. This is more conservative than the consensus forecasts at around 4.1 percent.
The government appeared more positive about the nation's economic prospects and forecast a GDP growth rate of 4.25 percent for this year, up from 4.09 percent last year, according to the Directorate General of Budget, Accounting and Statistics.
Yam said it was essential for the government to support the economy which is suffering from sluggish domestic demand and decelerating export growth.
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