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.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in