A narrowing current-account surplus and a rising net outflow on the financial account dragged down the nation’s overall balance of payments in the second quarter as it registered a surplus of US$4.9 billion, the central bank said yesterday.
The surplus in the April-to-June period was lower than the US$15.38 billion surplus registered in the same period last year, while it marked the 11th straight quarter that the balance of payments posted a surplus, the bank said.
The balance of payments — the current account, financial account and capital account — summarizes a nation’s economic transactions with the rest of the world during a period of time.
The current-account surplus totaled US$9.02 billion in the April-to-June period, down from a US$10.73 billion surplus in the first quarter because of a narrowing trade surplus, the bank said.
“Despite a rising services-account surplus, a greater decrease in the trade surplus led to a narrowing current-account surplus in the second quarter,” said Chen E-dawn (陳一端), deputy chief of the central bank’s economic research department.
A greater increase in imports compared with exports led to a year-on-year decline of US$1.97 billion in the trade surplus to US$5.9 billion, while the services account recorded a surplus of US$810 million, an increase of US$270 million from a year ago, the bank’s data showed
An increase in the net outflow on the financial account also dragged down the overall surplus, Chen said.
The financial account posted a net outflow of US$5.01 billion in the second quarter, with direct investment showing a net outflow of US$2.46 billion and portfolio investments decreasing by US$7.48 billion, the central bank said
“An increase in portfolio investments overseas was the main factor driving up the outflow on the financial account in the second quarter,” Chen said.
Portfolio investments posted a net outflow of US$12.79 billion, mainly because of insurance companies increasing their investments in foreign debt securities and investors buying units in foreign mutual funds, the report said.
In the first half, the current account recorded a surplus of US$19.75 billion, the financial account posted a net outflow of US$7.72 billion and the overall balance of payments was US$9.49 billion.