Tue, Aug 22, 2017 - Page 12 News List

Current account surplus increases in second quarter

By Crystal Hsu  /  Staff reporter

The nation’s balance of payments recorded a current account surplus of US$17.65 billion in the second quarter, backed mainly by improving exports amid a global economic recovery, the central bank said yesterday.

The increase came even though the financial account saw persistent capital outflows, while travel deficits intensified.

The latest balance of payments data summarized Taiwan’s transactions with the rest of the world between April and June on the part of residents and non-residents involving goods, services and income.

The figures are critical guides for policymakers when they seek to formulate economic policies to address payment imbalances and foreign direct investments.

“The current account saw an increase of 4 percent, or US$680 million, from the same period last year,” the bank said, as the nation’s export-driven economy benefited from better inventory demand for technology devices.

The goods trade surplus gained 5.3 percent, or US$970 million, from a year earlier to US$18.28 billion in the second quarter, as demand for semiconductors picked up, the bank’s report said.

Semiconductors account for about 25 percent of Taiwan’s outbound shipments as the nation is home to the world’s largest contract chipmakers.

Demand for semiconductors and a lower comparison base allowed export growth to widen by 9.5 percent, or US$8.05 billion, to US$84.6 billion in the quarter ended June, the bank said.

Financial and technology analysts closely watch the earnings of Taiwanese technology firms as they shed light on the performance of global technology brands, especially Apple Inc.

Imports grew by 10.7 percent, or US$7.07 billion, to US$66.32 billion last quarter, the report showed.

The central bank attributed the increase to export-related needs and price hikes on international raw material prices.

Import data, particularly on capital equipment purchase, are useful indicator of capacity expansion demand.

For the first half of the year, the current account posted a surplus of US$34.98 billion, the report said.

The financial account, which captures fund movements by financial institutions, saw net outflows of US$14.58 billion in the second quarter, an extra flight of US$1.82 billion from a year earlier, the bank said.

That is the 28th consecutive quarter of net outflows as local investors raised holdings in foreign-currency assets to pursue better yields. The trend is likely to persist after the US Federal Reserve hiked interest rates in June — the second time this year.

The central bank said it is common for countries with trade surpluses to register financial account deficits, as is the case with China, Japan, Singapore, Malaysia and Russia.

The financial account deficit widened to US$317.55 billion last quarter, the bank said.

The nation’s travel deficit stood at US$1.47 billion last quarter as the number of Chinese tourists shrank further, while Taiwanese increased travel abroad, the bank said.

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