Finance ministry bearish on exports

MIXED BAG::Exports to major Asian markets picked up only slightly, while shipments to Europe dropped 19.3% year-on-year, but shipments to the US increased by 4.9%

By Amy Su  /  Staff reporter

Wed, May 08, 2013 - Page 13

Exports last month declined by 1.9 percent from a year earlier, after posting a rise in March, leading the Ministry of Finance to be less optimistic over export momentum in the second quarter.

Outbound shipments totaled US$25.05 billion last month, down 1.9 percent from a year earlier and 8 percent from a month earlier, the ministry said in its monthly report yesterday.

On a seasonally adjusted basis, exports showed a 0.7 percent drop last month from the previous year, ending the growth recorded in the previous eight months, the report’s statistics showed.

“Demand in Asia did not continue picking up, while that in the European market showed a significant decrease, making exports last month turn weak,” Yeh Maan-tzwu (葉滿足), the ministry’s statistics department director, told a press conference.

Exports to major Asian markets — China, Hong Kong, Japan and the six main ASEAN members — showed slight growth of between 0.2 percent and 1.9 percent year-on-year last month, the report showed.

However, shipments to Europe shrank by 19.3 percent to US$2.84 billion last month from a year earlier, an indication that sluggish demand in Europe has been restricting Taiwan’s export momentum significantly, the report said.

Various global economic institutions — such as the IMF, IHS Global Insight and the WTO — revised down their latest forecasts for global trading volume this year, also raising uncertainties about Taiwan’s exports, Yeh said.

However, Yeh said that there was also good news for the nation’s exports, as shipments to the US grew 4.9 percent to US$2.84 billion last month from a year ago, with exports of information and communications technology (ICT) products to the US showing a 24.4 percent year-on-year expansion.

Yeh said electronics may remain the most important driver for the nation’s export sector, with the momentum of the nation’s other main export sector — mineral products — showing some uncertainties after one of Formosa Petrochemical Corp’s (台塑石化) plants has just emerged from a 45-day annual repair period.

Hong Kong-based ANZ Research senior economist Raymond Yeung (楊宇霆) said the sluggish trade growth would not likely affect the monetary policy of the central bank.

“We believe the central bank will not cut rates in response to sluggish growth, given generally relaxed liquidity conditions,” Yeung said in a research note.

The central bank would be inclined to maintain its policy rates at its board meeting next month due to stable growth in headline inflation, the research note said.

The ministry’s report also showed imports last month dropped by 8.2 percent from a year earlier and 5.2 percent from the previous month to US$22.77 billion.

Inbound shipments of capital equipment posted a 5 percent year-on-year expansion to US$2.94 billion last month, after reporting a significant increase over four of the past five months.

As a result, the trade surplus widened to US$2.27 billion last month, up US$1.55 billion from a year earlier, data showed.