The nation’s current-account surplus hit a record-high US$12.99 billion in the first quarter, while the capital account showed a net outflow of US$1.7 billion, compared with a net inflow of US$2.5 billion in the fourth quarter, the central bank said yesterday.
Dawn Chen (陳一端), deputy chief of the central bank’s economic research department, attributed the current-account surplus to a sharper decline in imports than in exports in the first three months of the year.
“Exports shrank 36.6 percent in the first quarter, while imports shrank 47.2 percent, raising the trade surplus to US$9.04 billion from US$4.27 billion a year earlier,” Chen told a media briefing.
The higher current-account surplus was partly the result of a smaller deficit in transfer payments, which reflected decreasing outward remittances to support overseas families, Citigroup Taiwan economist Cheng Cheng-mount (鄭貞茂) said.
“We think the current-account surplus will likely continue to grow in coming quarters as the contraction in imports continues to outpace export contraction,” Cheng said.
The capital, or financial, account, however, posted a net outflow despite net inflow of US$9.64 billion in the private sector.
“The deficit in the financial account was due to outflows in both direct and portfolio investments,” Cheng said.
But with recent money inflows, Cheng expected the financial account to improve, as both locals and foreigners expect net portfolio inflows in coming quarters.
The latest central bank data showed continued capital repatriation by individuals and companies, following cross-strait deregulation and a cut in the inheritance tax, but the pace of capital inflow decelerated in the first quarter compared with US$12.7 billion in the fourth quarter.
Chen said she expected better data in the second quarter in light of a recent equity rally. She also said national travel spending had dropped, perhaps because of direct cross-strait flights.
The official said that foreign visits dropped 9 percent in the first quarter but travel spending sank 34.5 percent in the same period.
Meanwhile, travel income rose 17 percent with the monetary regulator attributing the boost to arrival of Chinese tourists.
ADDITIONAL REPORTING BY KEVIN CHEN
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