The nation’s balance of payments last quarter recorded a current account surplus of US$22.24 billion, the third-highest for the second quarter in history, though exports softened amid a global economic slowdown and inventory adjustments lingered, the central bank said yesterday.
The current account surplus represented a drop of US$2.11 billion from three months earlier and it was the lowest since the second quarter of 2020, as COVID-19 bonuses faded and demand for technology products weakened, central bank research official Tsao Ti-jen (曹體仁) told an online news conference.
Taiwan is home to the world’s major suppliers of electronics used in smartphones, PCs, TVs, wearables and vehicles. Steep global inflation and interest rate hikes in advanced nations helped curtail demand for nonessential goods.
Photo: Ann Wang, Reuters
Imports also declined on falling prices of international raw materials and conservative restocking plans among companies at home and abroad. The retreat in imports was deeper than for exports, allowing Taiwan to maintain a trade surplus, Tsao said.
The balance of payments captures the sum of transactions with foreign entities. The data are commonly used as a reference for monetary policymaking.
At the same time, the services account turned from a surplus of US$3.71 billion from a year earlier to a deficit of US$2.48 billion, mainly owing to a decrease in freight proceeds and an increase in travel expenditure, Tsao said.
The nation’s three major cargo shippers — Evergreen Marine Corp (長榮海運), Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines (萬海航運) — all posted lower revenue compared with the previous year in the first six months and are conservative about the rest of this year.
Evergreen Marine emerged as the sole profitable shipping service provider during the second quarter, its financial statement showed.
The travel deficit widened to US$2.48 billion, the worst since the fourth quarter of 2017, as the number of Taiwanese traveling overseas surpassed foreign tourist arrivals, in line with a pattern seen before the COVID-19 pandemic, Tsao said, adding that more people would likely travel to foreign nations this quarter.
The financial account observed capital outflows of US$21.05 billion, bringing total capital outflows to NT$24 trillion in the past 52 quarters, Tsao said.
Capital outflows are common for economies with trade surpluses. Financial institutions have to park money in investment tools that offer better returns, Tsao said.
In the first half of the year, the overall balance of payments posted a current account surplus of US$41.33 billion, a net asset increase of US$31.52 billion on the financial account and an increase of US$9.94 billion in the central bank’s reserve assets, the central bank said.
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