Exports last month deteriorated much faster than expected, with a 13.9 percent decline from a year earlier, as demand for electronic components and devices slowed from all major trade partners, the Ministry of Finance said yesterday.
The contraction is the worst in nearly six years, raising concerns that the nation’s export-oriented economy might not recover in the second half of the year.
Exports weakened to US$23.07 billion last month, the lowest level since October 2010, as electronics shipments dropped 10.8 percent to US$7.42 billion, a ministry report showed.
Imports fell by 16.1 percent to US$20.89 billion last month, creating a trade surplus of US$1.5 billion, the report said.
For the first half of the year, exports contracted 7.1 percent to US$142.43 billion, worse than government projections in May.
Department of Statistics Director Yeh Maan-tzwu (葉滿足) said the downward adjustment might last until the middle of next month amid weak demand from domestic and international clients.
Taiwan is home to the world’s top contract chipmakers, chip designers, smartphone and PC vendors and critical component suppliers.
The decline in electronics shipments, formerly limited to DRAM and solar energy equipment providers, last month spread to other sectors, while cheaper crude prices continued to compress mineral, chemical and plastics exports, the report said.
In particular, exports of information and telecommunications products plummeted by 51.2 percent, while related components fell by 42.8 percent, likely reflecting softening sales of handsets in China and the rise of its own supply chain, Yeh said.
Australia and New Zealand Banking Group (ANZ) said the latest data confirmed its fear of a potential downturn in the global electronics cycle.
ANZ slashed its growth forecast for Taiwan for this year to 2.81 percent, from a previous estimate of 3.78 percent, with electronics products accounting for 32.8 percent of overall exports and a similar figure in industrial output.
ANZ Hong Kong-based economist Raymond Yeung (楊宇霆) said Taiwanese consumers are likely to start spending more cautiously as global financial markets become more volatile.
Shipments to all major trade partners retreated across the board — with exports to the US, the largest end-market for consumer electronics, shrinking 8.2 percent annually to US$2.82 billion last month, ending 17 months of gains, the ministry said.
Last month, exports to China fell 17.1 percent annually and those to ASEAN dropped 12.5 percent, while shipments to Japan and Europe contracted by 11.2 percent and 9.8 percent respectively, the ministry said.
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