Capital outflows totaled US$14.33 billion last quarter, the 25th consecutive quarter of outflows, while foreign investment declined as local financial institutions raised holdings in overseas assets to seek better returns, the central bank said in a report yesterday.
In the July-to-September period, local investors, insurers and other financial institutions increased their holdings of foreign equities and bonds by US$24.61 billion, while outbound foreign direct investment rose US$4.34 billion, the report said.
However, the pace of capital outflows slowed from the US$15.5 billion recorded in the April-to-June period, the report said, adding that foreign direct investment rose only US$200 million, the slowest growth in recent years, as Taiwan became less attractive to foreign investors.
Foreign institutional investors increased their holdings in Taiwanese stocks by US$2.87 billion, the report said, but Taiwan Stock Exchange data showed international investors cutting their holdings this quarter.
In the third quarter, the balance of payments registered a current account surplus of US$17.09 billion, with an increase of US$2.95 billion in the central bank’s reserve assets, central bank Economic Research Department Deputy Director Lin Shu-hua (林淑華) told a news conference, adding that reflected a “trend of oversaving.”
“Households have traditionally been suppliers of capital for corporate investment, but businesses have recently shied away from expenditures and begun increasing cash deposits,” Lin said.
Despite a gradual recovery in the semiconductor sector driven by new smartphone releases, the pace of expansion in the current account surplus fell US$1.11 billion, or 6.5 percent, to US$17.09 billion Lin said.
The balance of export goods fell about US$5.82 billion to US$78.97 billion, while a slump in export demand drove imports down US$5.06 billion to US$61.28 billion, Lin said.
“The pace of the global economic recovery remains weak, while Taiwanese suppliers face increasing competition from overseas,” Lin said.
The account deficit for tourism services last quarter expanded US$550 million to US$3.8 billion, the third consecutive quarter of decline, due to the number of Chinese tourists falling 28.4 percent annually, Lin said, adding that the number of outbound travelers rose 11.9 percent annually.
In the first nine months of the year, the balance of payments recorded a US$54.41 billion gain in the current account, an increase of US$47.29 billion in net assets in the financial account and an increase of US$9.95 billion in the central bank’s reserve assets, the report said.
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