Sat, Nov 08, 2008 page12

• Exports slump amid global downturn

  PESSIMISM Analysts said official forecasts of double-digit growth for the whole year are at risk as exports are likely to post even larger declines for the rest of the year

  • By Crystal Hsu / STAFF REPORTER
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  The global downturn sank Taiwan’s exports for the second month in a row last month as export value suffered its biggest decline in nearly seven years, with shipments to major partners except Japan all posting a decline, the Ministry of Finance said yesterday.

  “Export value dropped 8.3 percent, or US$1.88 billion, to US$20.81 billion in October from a year ago,” Lin Lee-jen (林麗貞), head of the ministry’s statistics department, told a press briefing yesterday afternoon.

  “Likewise, imports dropped 7 percent, or US$1.35 billion, to US$17.86 billion, leaving a trade surplus of US$2.95 billion,” Lin said.

  She blamed the slump in exports, the sharpest since January 2002, on the financial storm that is battering the US and Europe and dampening demand for Taiwan’s consumer electronic and communications products.

  Shipments to China and Hong Kong last month fell 19.9 percent, or US$1.85 billion, to US$7.47 billion year-on-year, while exports to the US decreased 11.4 percent to US$2.57 billion, the ministry’s report said.

  Shipments to Europe and emerging countries in Asia dipped 5.1 percent and 5.7 percent to US$2.56 billion and US$3.25 billion respectively, the report showed.

  Lin conceded the figures were disappointing and the trend would likely persist through the end of the year, but voiced confidence that exports could still post double-digit growth for the full year.

  Exports for the first 10 months stood at US$225.24 billion, up 11.9 percent from last year, while imports gained 18.5 percent to US$213.84 billion, leaving an accumulated trade surplus of US$11.4 billion, the report showed.

  Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup Inc Taiwan, said he was surprised at the size of the fall in both exports and imports.

  “I expected exports to drop 6.6 percent and imports to rise 4.1 percent last month,” Cheng said by telephone.

  “The outcome shows the financial turmoil is having a more severe impact on Taiwan and bespeaks an economic outlook more pessimistic than estimated,” he said.

  Looking ahead, Cheng said exports were likely to shrink further for the rest of the year on worse-than-expected US consumer spending and unemployment.

  The falling imports, on the other hand, showed domestic demand remained weak even though the government had adopted various measures to stimulate it, he said.

  Tine Olsen, an economist at Moody’s Economy.com based in Sydney, said that Taiwan’s economy was “in despair” given the sharp decline in imports.

  “The contraction in imports reveals the troubles of the domestic economy, where retail sales have been tumbling for months and consumer confidence is historically low,” she wrote in a research note released yesterday.

  Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), said declining exports to almost all major trade partners deepened concern about a global economic recession.

  “Though the trade balance remained in the black, the volume is increasingly contracting and may be meaningless after being adjusted for inflation,” Liang said by telephone.

  Liang warned the nation to brace for a tough, long winter, with exports likely to post even larger declines in the months ahead.

  The government is expected to revise its GDP growth forecast for the remainder of the year and next year later this month after economic officials said earlier it would be difficult for the nation to achieve its target of 5.08 percent growth next year.
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