TAIPEI: Minister of Finance Chang Sheng-ford said Wednesday that the year-on-year fall in Taiwan’s exports for July is expected to moderate.
Talking to reporters, Chang confirmed that the country will continue to report a contraction in exports in July, although he has not read the formal July export document yet. But, Chang said that a peak season in the second half of this year is expected to help Taiwanese exporters climb out of the doldrums of the first half.
The Ministry of Finance is scheduled to release the July export data Friday.
In June, Taiwan’s exports fell 13.9 percent from a year earlier, marking the fifth consecutive month for outbound sales to register a drop. In the first six months of this year, the country’s exports declined 7.1 percent from a year earlier.
Chang said that the steep drop in June’s exports largely resulted from a plunge in international crude oil prices which led to a weakening pricing power of many local exporters.
In addition, Chang said that lower-than-expected global demand for high tech devices also sent Taiwan’s outbound sales lower in June, when exports of electronics gadgets and information/communications products dropped 10.8 percent and 31.4 percent, respectively.
However, Chang said that he remains confident in the world’s demand for the second half of this year, which is expected to pick up on the back of seasonal factors, in particular a buying spree during the Christmas season.
Due to the worse-than-expected exports in the second quarter, Taiwan’s gross domestic product (GDP) grew only 0.64 percent from a year earlier, far lagging behind an earlier estimate of a 3.05 percent increase made by the government in May.
Chang said that the second quarter economic growth data largely reflected the weakness of the world’s oil market and had no direct links with Taiwan’s global competitiveness, indicating that many of Taiwanese firms remained competitive in the world market.
He said that the worst of the local economy has become a thing of the past, and a peak season in the second half of the year is expected to raise global demand and eventually give a shot to Taiwan’s exports.
But, Chang remained cautious about the emerging clout of China, which has made plenty of efforts to cultivate its own supply chain in the electronics sector. He said that China’s high tech sector has posted threats to its Taiwanese counterpart.
