Taiwan: Merchandise exports slide in September
Merchandise exports fell 5.3% year-on-year in September (August: +2.0% year-on-year). September’s outturn marked the sharpest decline since January 2020, and was driven by falls in exports of IT products, metals, plastics and machinery. Only the crucial electronics subsector recorded growth—albeit at a much-reduced rate compared to August. Exports to China suffered a double-digit decline, likely due to weakening demand there due to Covid-19 restrictions and a property downturn. Exports to the U.S. and Europe also fell. Meanwhile, merchandise imports declined 2.4% in annual terms in September (August: +3.5% yoy), marking the weakest reading since September 2020.
As a result, the merchandise trade balance improved from the previous month, recording a USD 5.0 billion surplus in September (August 2022: USD 3.0 billion surplus; September 2021: USD 6.3 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 58.2 billion surplus in September, compared to the USD 59.5 billion surplus in August.
Looking forward, a slowdown in the developed world, a sluggish Chinese economy and a shift in spending from goods to services will all weigh on Taiwanese exports. The external sector could be further dampened by the recent U.S. decision to ban companies using U.S. equipment from selling to Chinese semiconductor firms under certain circumstances; Taiwanese chip giant TSMC is likely to see its revenue dampened as a result. A further tightening of U.S. restrictions on tech exports to China is a downside risk to Taiwan’s export outlook.