The nation’s exports declined 11 percent year-on-year last month, down by double digits for five months running, but easing from a 14.6 percent fall in September, indicating a slow improvement in external demand, the Ministry of Finance said yesterday.
The results came in line with a market consensus that the global slowdown will continue to weigh on electronics shipments while price distortions caused by cheaper oil prices might not taper off until next year.
Exports, which account for 70 percent of GDP, dropped for the ninth consecutive month this year to NT$785.99 billion (U$23.94 billion) last month, the ministry’s report showed.
“All product categories recorded a retreat due to protracted inventory adjustments and the falling oil prices deepened conservative sentiment among firms,” Department of Statistics Director-General Yeh Maan-tzwu (葉滿足) said.
The economic landscape might brighten a bit going forward, but not fast enough to elevate exports back to a positive zone in the foreseeable future in light of lingering price concerns, Yeh said.
OPEC crude oil averaged US$75 a barrel in November last year, 40 percent higher than the current US$45 a barrel, suggesting a continued and steep drag on exports of mineral, plastic and basic metal products this month and beyond, Yeh said.
Likewise, the decline in imports narrowed to 20 percent year-on-year to US$17.82 billion last month, as firms shied away from buying capital equipment or raw material products, the report said.
That rendered a trade surplus of US$6.12 billion last month, widening from US$5.25 billion in September, the report showed.
Shipments to all trade partners saw double-digit declines, with the exception of Japan, which increased imports from Taiwan by 0.2 percent from a year earlier, the report found.
Exports to China dropped 11.7 percent to US$9.56 billion last month and fell 9.1 percent to the US at US$2.79 billion, the report said.
“Demand for information and communications devices panned out softer than expected as the economy in China slows,” Yeh said.
Electronics products, which drove 36.7 percent of all exports, shrank 4 percent to US$8.79 billion last month from a year earlier, the report said.
The figure is a significant improvement from a 9.9 percent decline to US$8.01 billion in September, lending support to expectations that the worst is likely over for the technology cycle, Yeh said.
KGI Securities Co (凱基證券) economist Andrew Tsai (蔡耀德) said that a rebound is taking place, though at a snail’s pace.
The advent of the Christmas sales season might spur demand for consumer electronic devices, easing the decline in exports in coming months, Tsai said by telephone.
Against this backdrop, the central bank might cut interest rates by another 12.5 basis points next month to encourage economic activity, he said.
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