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Taiwan Trade June 2023

Taiwan: Merchandise exports contract at a quicker pace in June

Merchandise exports dived 23.4% in annual terms in June, following May’s 14.1% plummet. June’s outturn marked the worst drop since August 2009, and was nearly twice as steep as the contraction expected by market analysts. Exports of all major subsectors contracted, including from the crucial electronics and IT subsectors. Exports to China, ASEAN, Japan and the U.S. all fell by over a fifth. Meanwhile, merchandise imports slid 29.9% over the same month last year in June (May: -21.7% yoy), also marking the weakest result since August 2009.

As a result, the merchandise trade balance improved from the previous month, recording a USD 6.0 billion surplus in June (May 2023: USD 4.9 billion surplus; June 2022: USD 4.6 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 51.0 billion surplus in June, compared to the USD 49.6 billion surplus in May.

Looking ahead, the finance ministry expects a further double-digit decline in exports in July, as global interest rate hikes and China’s slowing economy will continue to sap overseas demand. The Consensus among our analysts is that exports will only return to growth in Q4, aided by a more favorable base of comparison given the sharp fall in exports in Q4 last year.

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