Taiwan’s exports, the main driver of its economic growth, declined 1.6 percent year-on-year last month for the first time in six-and-half years as the global financial crisis continued to dampen demand for consumer products, the Ministry of Finance said yesterday.
“Exports value dropped 1.6 percent to US$21.85 billion in September from a year ago,” director of the ministry’s statistics department Lin Lee-jen (林麗貞) said. “Imports gained 10.4 percent to US$21.04 billion during the same period, leaving a trade surplus of US$810 million.”
It is the first time since April 2002 the nation posted a negative growth in exports and Lin blamed the international financial storm for the bearish performance.
ELECTRONICS
“Shipments of electronic and communications products noticeably decreased, owing to falling demand from major trade partners,” Lin said. “It remains to be seen if the trend will persist for the rest of the year.”
Shipments to China, the destination of 40.1 percent of Taiwan’s exports in the first nine months, plunged 16.3 percent or US$1.59 billion year-on-year last month to US$8.19 billion, Lin said.
Exports to emerging markets in Asia, which together replaced the US as the second largest trade partner, sank 4.4 percent to US$3.03 billion, Lin said.
Shipments to the US and Europe rose 4.7 percent and 9.2 percent respectively from the previous year, while exports to Japan gained 14.5 percent, the report showed.
Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), said he was not surprised by the falling shipments to China, as the giant neighbor purchased many more products last year to pave the way for the Olympic Games this summer.
CONCERN
Regardless, Liang said that the figures were some cause for concern as the ongoing credit crisis has yet to show any signs of letting up and may have a deeper and longer impact on Taiwan’s exports and economy than expected.
“I’m skeptical the fourth quarter will fare any better as the equity market turmoil worldwide is shrinking people’s wealth and weakening consumer activities,” Liang said by telephone.
Kevin Hsiao (蕭正義), director of UBS Wealth Management Research in Taiwan, said he had expected exports to decline but was shocked at the size of the slump.
“The [export] showing is way worse than expected,” Hsiao said by telephone. “The economy will suffer as exports have played the main driver of the nation’s GDP growth.”
Liang and Hsiao said it is not necessary for the central bank to devaluate the NT dollar to help boost exports because doing so cannot reverse the global slowdown, the root of falling demand.
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