Taiwan export decline slows to 30.4pc but recovery hopes fade
Taiwan's exports dropped 30.4 per cent last month, a smaller extent than in May, on sluggish demand for electronic products, dashing economists' hopes for an imminent recovery.
The Ministry of Finance revealed yesterday exports last month were US$7.39 billion lower year on year at US$16.94 billion, compared with a 31.4 per cent decrease in May.
It said the contraction in imports moderated to 33.5 per cent, from a 39.1 per cent fall in May.
Some economists were disappointed at the slow improvement in the island's export sector, which was still haunted by globally weak demand for electronics and gadgets, its key export products.
They were also disappointed that the mainland's much-touted plan to stimulate consumption of electrical appliances in rural areas had yet to show any positive impact on Taiwan.
'The export situation appears to be gloomier than we expected,' said Tao Dong, Credit Suisse's chief economist for Asia excluding Japan.
'We know the recession dampened global consumer demand, wealth was destroyed and retailers were burning stocks since the collapse of Lehman Brothers. In the meantime, we hope retailers' inventory will be rebuilt and make exports better. But we haven't seen this happen yet in Taiwan and across Asia.'
Mr Tao blamed poor demand for electronics dragging down the island's exports.
Taiwan ended the first six months of this year with a 34.2 per cent fall in exports to US$88.48 billion and a 42.3 per cent slide in imports to US$72.95 billion. This jacked up the trade surplus by 93.1 per cent year on year to US$15.53 billion in the first half.
Trade with its largest markets - the mainland and Hong Kong - remained weak, with shipments down 30.2 per cent to US$7.05 billion last month or down 36.2 per cent in the first half to US$35.04 billion.
Exports to other markets such as the United States, Japan, Europe and six countries of the Association of Southeast Asian Nations fell by double digits, led by a 38.5 per cent slump in exports to Europe last month or 36 per cent for the first six months.
Goldman Sachs said in a research report it expected closer economic ties between the mainland and Taiwan would lead the island on an economic recovery path this half of the year and next year.
It forecast that Taiwan's economy would turn around from a 7 per cent decline this year to 3.5 per cent growth next year as cross-strait trade intensifies.
Taiwan is among the first in Asia to post its trade figures. Other major indicators of global demand such as China and South Korea's trade data will follow in coming weeks.
Poor electronics demand blamed for island's exports dive
Taiwan's exports in June were US$7.39 billion lower year on year at, in US$: $16.9b