TAIPEI: Taiwan’s exports might have contracted more than 15 percent last month from a year earlier, as the decline in crude and raw material prices widened, weakening demand from clients in advanced and emerging markets alike, economists said here the other day.
The forecasts suggested the fastest downturn in outbound shipments in nearly three years, boding ill for the nation’s export-focused economy.
The Ministry of Finance is due to release last month’s trade data on Monday.
“Like South Korea, Taiwan’s exports likely suffered a significant retreat of 15 percent year-on-year to US$23.88 billion last month, hit by a global slowdown and falling crude and raw material prices,” KGI Securities Co economist Andrew Tsai said by telephone.
The deepening fall in the global purchasing managers’ index and soft demand from the US and China warranted the grim projection, as evidenced by South Korea’s poor export data, Tsai said.
South Korea’s exports plunged 14.7 percent from a year earlier to US$39.33 billion last month, the largest fall since August 2009, when the comparable figure dipped 20.9 percent year-on-year. It also represented the country’s eighth consecutive month of decrease in exports.
Like South Korea, Taiwan relies heavily on electronics exports and could not emerge unharmed from lingering technology inventory adjustments worldwide, Tsai said.
Taiwan is home to the world’s largest contract chipmakers, smartphone vendors and critical component suppliers.
The extended soft patch likely prompted companies to cut capital expenditure and exacerbate import contraction, he said.
CTBC Bank, the nation’s largest credit card issuer, adopted a bleaker view, forecasting that exports had dropped 16.3 percent last month from a year earlier, the worst showing since January 2012.
“The high base in August last year also helped draw a stark contrast for the results this year,” CTBC Bank economist Kingsley Lin said over the telephone.
Companies in traditional sectors likely fared worse last month, given sharper downward volatility in international crude prices, Lin said.
Exports of mineral products plunged by more than 50 percent in July from a year earlier, while chemical and plastic shipments shrank 23.8 percent and 15.9 percent respectively, the finance ministry data showed.
Imports may have tumbled 19.5 percent last month, accelerating from a decline of 17.4 percent in July, as crude and raw material prices took a hit, Lin said.
Still, the nation may have recorded a trade surplus of between US$3.8 billion and US$4.2 billion last month, thanks to poorer imports, both Tsai and Lin said.
While the global slowdown is set to weigh on private investment and consumption, GDP growth this quarter may benefit from a local currency depreciation against the greenback, Tsai said.
The New Taiwan dollar has shed 4.8 percent against its US counterpart so far this quarter, a trend that will allow exporters to book noticeable foreign exchange gains despite stalling business, Tsai said.
