The central bank’s quarterly balance-of-payments report on Friday showed that current-account surplus tumbled 27.3 percent from a year earlier to US$18.65 billion in the fourth quarter last year, as net exports sank sharply.
The current account, calculating a nation’s transactions with foreign countries, mainly reflects the trade balance in merchandise and services.
Net exports — exports minus imports — shrank 24 percent from a year earlier to US$17.47 billion, as the US$800 million decline in imports was less than the US$6.25 billion plunge in exports, the central bank said, adding that it was due to slowing global demand and lackluster growth in the smartphone market.
For the whole of last year, exports rose 1 percent annually to US$353.45 billion and imports gained 6.2 percent to US$285.71 billion, resulting in a trade surplus of US$67.73 billion, down 16.2 percent from 2017, central bank data showed.
“The increase in imports reflects the increases in crude purchases in the second and third quarters because of favorable prices, as well as more purchases of machinery equipment in the third quarter for new investments,” Eugene Tsai (蔡炯民), deputy director-general of the central bank’s Department of Economic Research, said at a news conference in Taipei.
With the trade surplus declining, the current-account surplus totaled US$68.26 billion last year, down US$14.58 billion from 2017 and the lowest in four years since the US$60.44 billion surplus in 2014, the central bank said.
However, the service trade balance, the second-biggest component of the current account, last quarter improved on travel revenue, with the service trade deficit narrowing 48.34 percent quarterly to US$780 million, it said.
That helped the full-year service trade deficit contract 21.4 percent annually to US$6.82 billion, the data showed.
The report also showed a deficit of US$17.88 billion in financial account for last quarter, indicating net capital outflows.
Last quarter's financial account deficit was down 17.9 percent from the US$21.78 billion a year earlier, the data showed.
Local banks’ short-term net borrowing of US$4.3 billion from their foreign peers last quarter, compared with their net lending of US$6.5 billion a year earlier, contributed to the decline in the financial account deficit, the data showed.
Last quarter was the 34th consecutive quarter that the financial account had posted a net outflow, the longest on record, and brought the total deficit to US$51.92 billion for the whole of last year, the central bank said.
Aggregate net outflows over the past 34 quarters totaled US$413.31 billion, it said.
Separately, overseas securities held by Taiwanese last quarter fell 16.4 percent annually, as domestic life insurers bought less foreign equities amid foreign-exchange volatility.
Foreign portfolio managers reduced their local share holdings by US$3.11 billion as the TAIEX fell sharply over the period, Tsai said.
For the whole of last year, foreign portfolio managers cut local share holdings by US$11.9 billion, a seven-year high, compared with a net increase of US$3.89 billion a year earlier, the data showed.
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