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Taiwan Trade Balance May 2022

Taiwan: Merchandise exports increase at a more moderate pace in May

Merchandise exports rose 12.5% year-on-year in May, on the heels of April’s 18.8% upturn. The outturn marked the weakest growth since February 2021, and was driven by a sharp slowdown in exports to China, likely as a result of Chinese Covid-19 restrictions. Meanwhile, merchandise imports jumped 26.7% on an annual basis in May (April: +26.7% yoy), due to far higher commodity prices.

As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 2.4 billion surplus in May (April 2022: USD 4.9 billion surplus; May 2021: USD 6.1 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 61.7 billion surplus in May, compared to the USD 65.4 billion surplus in April. Export orders—which typically lead actual exports by two to three months—dived 5.5% in April, the latest month for which data is available, suggesting soft trade momentum going forward. The decline in export orders confounded market expectations of a double-digit increase, and was linked to lockdowns in China.

Looking forward, lingering pandemic restrictions in China are set to weigh on exports in the near term. However, healthy global semiconductor demand should provide support. Meanwhile, import growth will be sustained by higher prices for key commodities, given Taiwan is highly dependent on imported energy and food.

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