Taiwan: Merchandise exports increase at a milder rate in July
Merchandise exports rose 3.1% in annual terms in July (June: +23.5% year-on-year), roughly half market expectations. July’s figure marked the slowest expansion since February. While IT exports surged by over a third, they were partly offset by falls in all other export categories. Looking at key trading partners, higher shipments to the U.S. offset lower exports elsewhere. Meanwhile, merchandise imports jumped 16.2% on an annual basis in July (June: +33.9% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 4.8 billion surplus in July (June 2024: USD 4.7 billion surplus; July 2023: USD 8.5 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 86.6 billion surplus in July, compared to the USD 90.3 billion surplus in June.
On the latest data, ING’s Lynn Song said:
“In short, it looks like exports are being driven by exports of computers to the US, while other areas are showing some signs of vulnerability. This sets up Taiwan’s exports for a larger-than-normal impact if the US ends up facing a recession, which appears to be an increasingly salient risk given the [recent] developments.”