Taiwan: Merchandise exports decrease at a softer pace in July
Merchandise exports fell 10.4% year-on-year in July, following June’s 23.4% dive. July’s result marked the smallest fall since October 2022 and was a smaller fall than markets were expecting, but was still the eleventh straight contraction. Booming IT exports partly offset lower electronics, metals, machinery and plastics exports. Looking at key markets, only exports to Europe rose, with those to China falling the most steeply, reflecting the shaky Chinese economy. Meanwhile, merchandise imports dived 20.9% over the same month last year in July (June: -29.9% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 8.5 billion surplus in July (June 2023: USD 6.0 billion surplus; July 2022: USD 5.0 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 54.4 billion surplus in July, compared to the USD 50.9 billion surplus in June.
Looking ahead, Taiwan’s finance ministry sees another sizable—though slightly softer—decline in exports in August. Our analysts see exports continuing to decline year on year in Q3, but returning to growth in Q4 on a more favorable base of comparison.