Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday the country’s declining export orders in the first six months of this year serve as a big warning sign for the economy and an indication that the nation needs to address the issue with both a middle and long-term perspective.
Export orders fell consecutively in the first five months year-on-year, except during Lunar New Year, ministry data showed.
To combat falling exports, the ministry has launched a short-term project, Shih said on the sidelines of a meeting to promote investment. The project, which started on May 23 and runs until the end of the year, specifies measures to boost orders from advanced markets and emerging markets as well as China.
“However, the problem should be looked at from middle and long-term perspectives, rather than just the short term,” Shih said. “The biggest concern is that Taiwan is losing its competitiveness compred with its neighbors.”
Shih attributed the slip in export orders to an over-export of intermediate materials and not enough end-products, as well as saying industrial flight was taking its toll. Intermediate materials are more vulnerable to economic changes overseas, he added.
Shih said that DRAM, flat panels and smartphones were the three categories that suffered the most in export declines.
“We are less competitive than our neighbors, especially South Korea, and we have to examine what has gone wrong,” Shih said.
When asked whether the country will continue to write down its GDP growth forecast to below 3 percent, Shih said the ministry would strive to promote exports, consumer power and foreign investments to help keep the country’s GDP growth above 3 percent.
On Monday, the IMF lowered its economic forecast this year for the four Asian Tigers — Taiwan, Hong Kong, Singapore and South Korea — by 0.6 percentage points to 2.7 percentage in the light of worse-than-expected international trade volumes.
Liu Meng-chun (劉孟俊), director of the center for economic forecasting at Chung-Hua Institution for Economic Research (中華經濟研究院), a Taipei-based think tank, said yesterday that Taiwan would struggle to maintain its economic growth above 3 percent this year, due to poor exports and weak domestic consumption.
The Directorate-General of Budget, Accounting and Statistics on May 25 revised downward the GDP growth forecast for this year to 3.03 percent from the 3.38 percent that it had estimated in April.
Additional reporting by CNA