Exports last month contracted for a third consecutive month from a year ago, but could return to positive territory this month, given a lower comparison base last year and stronger momentum led by new electronics products, the Ministry of Finance said yesterday.
Outbound shipments dropped 6.3 percent year-on-year to US$26.1 billion last month, but were up 2.2 percent from April’s US$25.54 billion, ministry data showed.
“It is good news that exports for last month did not continue to fall from April,” Lin Lee-jen (林麗貞), director of the ministry’s statistics department, told a press conference.
Despite the anticipated pickup this month, cumulative exports in the first six months are forecast to post a year-on-year decline as continuing global uncertainties affect overall demand, Lin said.
Exports to China and Hong Kong, the US and Europe — the nation’s three major export markets, which accounted for almost 60 percent of outbound shipments — dropped more than 10 percent last month from a year ago and was the main factor leading to the overall decline in exports.
Eight of the nation’s 10 major export sectors posted year-on-year declines last month, with shipments of information and communication technology (ICT) products marking the largest drop at 30.6 percent, ministry data showed.
Katrina Ell, a Sydney-based associate economist at Moody’s Analytics, said the export figures show that Asia’s technology exporters continue to face headwinds from weak global demand.
“We expect the second quarter will be the trough, but with global ructions continuing to drag on real economic activity, weakness could spill over into the third quarter,” Ell said in a research note.
Imports last month also dropped, by 10.5 percent year-on-year and 4.1 percent month-on-month, to US$23.83 billion, mainly because of lower demand for agricultural and industrial raw materials, data showed.
On a more positive note, imports of capital goods increased 7.7 percent to US$3.34 billion from April, picking up for the fourth straight month as companies increase investments, the ministry said.
Taipei-based Standard Chartered Bank economist Tony Phoo (符銘財) said local producers’ confidence appeared to be holding up, lending support to capital expenditure and hiring for now.
“The data still supported our view that growth might continue to rebound from a year earlier into the second half, albeit only gradually,” Phoo said in a research note.
Phoo said the central bank was likely to keep policy interest rates steady when the board meets again on June 21.
The trade surplus last month totaled US$2.26 billion, up 83.9 percent from a year ago, as the fall in imports outpaced that of exports, data showed.