English | 中文版 |  Русский

Breaking News:

Source: www.asiaecon.org |

TAIWAN EXPORTS FALL FOR 7 CONSECUTIVE MONTHS


The longest streak in seven years, Taiwan's exports fell for the seventh straight month in March. Exports in March fell 35.7 percent year-on-year to $15.59 billion as demand of the island's goods was battered by the global downturn. Despite low demand from China, Europe, and the U.S., the government expects exports to recover in the coming months from the improving demand for electronic products.  


The longest streak in seven years, Taiwan’s exports fell for the seventh straight month in March. Exports in March fell 35.7 percent year-on-year to $15.59 billion as demand of the island’s goods was battered by the global downturn. Despite low demand from China, Europe, and the U.S., the government expects exports to recover in the coming months from the improving demand for electronic products.

In addition, recent fiscal stimulus measures and loose monetary policies adopted by governments and central banks around the world will also help boost exports, according to the government.

Lin Lee-jen, director of the Ministry of Finance’s Department of Statistics was quoted, “If exports continue improving for the next two to three months (in monetary terms), we can say with more certainty that the export sector is bottoming out”.

Taiwanese exports had surpassed many economists’ expectations. The median forecast of exports falling was higher than actual at 36.5%, 1.2% higher. This was most likely due to rush orders for electronics products and demand from companies that sought to restock their inventories in China and Hong Kong.

Imports in March fell 49.5% from a year earlier to $12.17 billion, actually being steeper than the median forecast of a 45% fall.

Trade surplus had also increased sharply than economists’ forecast as well. Taiwan had a trade surplus of $3.41 billion in March, more than double its trade surplus of $1.67 billion in February. In relation to economists’ forecast, actual performance more than doubled expectations of $1.56 billion.

Taiwan has also taken monetary measures to help expand the economy. Taiwan’s central bank has cut interest rates to a record-low 1.25 percent and the government plans stimulus spending of $25.6 billion over four years on infrastructure works, tax cuts, and consumer grants.

Experts believe that China and Hong Kong could help to cushion the effect of slowing global demand for technology goods.

UBS economist Sean Yokota said, “Taiwan doesn’t need a lending hand from China since it has already bolted itself onto China’s domestic demand cycle”. He explains, “As long as China helps itself, Taiwan should automatically reap the benefits. Taiwan’s exports will continue to become less negative with a sustainable recovery in China”.

Others are not so optimistic in the recent turn of events. KGI Securities economist Fang Wenyen said, “demand from china is still mainly on rush orders, and the sustainability is not firm, while demand from end-destinations such as the U.S. and Europe has not yet stabilized”. She expects Taiwan’s export orders to hover around $15 billion to $16 billion in the remaining months of 2009.

The Asian Development Bank had said earlier that the economies of Asia excluding Japan may recover next year with a 6 percent expansion, despite slowdown in the region’s economic growth.

Cheng Cheng-mount, an economist at Citigroup Inc. in Taipei commented, “China’s push to encourage rural consumption is starting to take effect”. He added, “Taiwan’s economy is showing some signs of recovery but we may not have seen the bottom yet”.

Source: www.AsiaEcon.org
Please send comments and constructive suggestions to feedback@AsiaEcon.org

Source: www.asiaecon.org |


More Special Articles - Asia Business & Economy Articles