Taiwan posted a strong current account surplus in the first quarter, driven mainly by a surge in exports linked to global demand for new technologies, especially electronics used in artificial intelligence applications, the central bank said yesterday.
The current account surplus rose by US$32.84 billion from a year earlier in the January-to-March period. The key driver was the goods trade surplus, which widened to US$58.01 billion, up US$30.97 billion, the bank said.
Export growth was fueled by strong demand for advanced electronics and semiconductors, reflecting continued momentum in emerging technology applications, it said.
Photo: Liao Chia-ning, Taipei Times
By contrast, the services account deficit widened to US$3.42 billion, the second-highest quarterly shortfall on record. This was mainly due to higher overseas travel spending, as more Taiwanese traveled abroad, the bank said. The trend reflects stronger household incomes and continued enthusiasm for overseas travel, particularly among younger people, it said.
On the financial account, Taiwan saw continued capital outflows, with net direct investment assets rising by US$7.37 billion from a year earlier, as local firms increased overseas investments, while foreign direct investment into Taiwan increased by US$2.64 billion, the bank said.
Foreign investors reduced their holdings of Taiwan equities, resulting in a net portfolio outflow of US$25.34 billion during the first quarter, a record high for a single quarter following the outbreak of military conflicts in the Middle East, the bank said.
Other investment flows also contributed to the outflows, driven by higher overseas deposits and increased trade-related lending by private firms, it said.
This suggests that while Taiwan’s export performance remains strong, global investors are becoming more selective about local stocks, and domestic investors are increasingly diversifying abroad.
Overall, capital outflows led to a balance of payments deficit of US$4.66 billion, the bank said.
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