Taiwan: Merchandise exports slide at softer pace in August
Merchandise exports contracted 7.3% year-on-year in August (July: -10.4% year-on-year). August’s result marked the smallest contraction since October 2022, and was a smaller fall than markets were expecting. Lower exports of electronics, metals, machinery and plastics were partially offset by higher IT exports. Looking at destinations, shipments to the U.S. and Europe rose, while those to China continued to fall by double digits. Meanwhile, merchandise imports slid 22.9% on an annual basis in August (July: -20.9% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 8.6 billion surplus in August (July 2023: USD 8.5 billion surplus; August 2022: USD 3.0 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 60.0 billion surplus in August, compared to the USD 54.4 billion surplus in July.
Looking ahead, the finance ministry predicts the annual variation of exports to be -2% to +2% for September, aided by a favorable base of comparison and rising demand for AI, high-end computing, data centers and car electronics. The same factors should then support an expansion in exports over Q4 as a whole.
On the latest data, EIU analysts said:
“These data suggest that a prolonged period of high inventories is ending, while the launch of new smartphone models by leading global brands is reviving demand for electronic components. There is still ample room for caution: the year-on-year data for August were flattered by a low base of annual comparison, while negative month-on-month growth (at -3.5%) still hints at lingering strains in external demand. […] There is a high likelihood that Taiwanese export growth (in year-on-year terms) will turn positive from September, although absolute export values will continue to trend below previous pandemic-era highs.”