Exports last month failed to continue their pick-up, sliding 1.9 percent from a year earlier, the Ministry of Finance said yesterday, confirming fears that full-year exports would contract and that Taiwan could post the worst performance among Asia’s major exporters.
However, the base effect may help exports post growth in the fourth quarter compared with a year ago, the ministry added.
Outbound shipments totaled US$26.53 billion last month, which were also down 2.4 percent from a month earlier, the ministry said in a report. Cumulative exports in the first 10 months of the year dropped 3.7 percent to US$250.13 billion.
Exports had just ended six consecutive months of decline by rising 10.4 percent year-on-year in September, but the rebound proved to be short-lived, partly due to a higher base last year, the ministry said.
A sharp contraction in shipments of information and communication technology (ICT) products, which fell 36.1 percent last month from a year earlier, was the main culprit behind the slide in exports, it said.
“The sluggish shipments of mobile phones was the main factor that dragged down the nation’s exports of ICT products,” Yeh Maan-tzwu (葉滿足), director of the ministry’s statistics department, told a press conference.
Yeh added that the lower-than-expected shipments of smartphone maker HTC Corp (宏達電) — the major player in Taiwan — significantly affected exports this year.
With global trade momentum remaining weak, Taiwan might post the largest contraction in annual exports among the major countries in Asia, as the nation’s industries structure is highly concentrated in certain sectors, Yeh said.
However, as the economy gradually bottoms out, the nation might still see growth in the fourth quarter, he said.
Meanwhile, imports last month fell 1.8 percent from a year and a month ago to US$23.27 billion. Cumulative imports in the first 10 months of the year were also down 4.7 percent to US$227.26 billion, ministry data showed.
That resulted in a trade surplus of US$3.26 billion last month, US$900 million less than a year earlier, data showed.
Katrina Ell, a Sydney-based associate economist at Moody’s Analytics, said that export and import figures for last month both surprised heavily on the downside.
“We had expected [the] trade data to be more positive in the fourth quarter, with other indicators suggesting improvement would occur,” Ell said in a research note.
Meanwhile, a research note issued by Australia and New Zealand Banking Group said the downside surprise in exports would not significantly affect the central bank’s policy stance.
Inflationary pressures appear to be moderate, with the policy rate remaining at a low 1.875 percent, the note said, adding that Taiwan still faces the risk of falling into a negative real interest rate zone.
Since the recent recovery in trade remains very fragile, the central bank is likely to hold on to its policy rate at its board meeting next month, it said.