Taiwan’s exports fell for a fourth straight month in December due to the worsening state of the global economy, as inflation and rising interest rates weighed on demand, and benefits from China’s relaxation of its COVID-19 controls had still to emerge.
Exports dropped 12.1 per cent by value last month from a year earlier to US$35.75 billion, the lowest in 20 months, the Ministry of Finance said on Saturday (Jan 7).
That followed a 13.1 per cent drop in November, and was slightly better than Reuters poll forecast for a 13.3 per cent contraction.
For December, the ministry said global demand was slowing gradually, due to inflationary pressures and interest rate rises in major economies, as well as disruptions to factory production in China amid a spike of COVID-19 cases after Beijing dismantled its zero-COVID regime.
The ministry saw Taiwan’s exports continuing to decline in the first quarter as it expected the global economy to “slow significantly”, with major uncertainties posed by both the war in Ukraine and the spread of COVID-19 in China.
“The positive demand driven by new technologies and rising silicon content in end products would not be able to offset these negative impacts,” the ministry said in a statement.
Taiwan’s total exports of electronics components in December fell 1.4 per cent to US$16.04 billion, with semiconductor exports up 0.8 per cent from a year earlier.
Firms such as TSMC, the world’s largest contract chipmaker, are major suppliers to Apple Inc and other global tech giants, as well as providers of chips for auto companies and lower-end consumer goods.
At US$14.28 billion in December, Taiwan’s exports to China, the island’s largest trading partner, were down 16.4 per cent from a year ago, after suffering a 20.9 per cent drop in November.
Taiwan’s finance ministry said risks ahead included uncertainty the US-China tech war, adding that January exports could contract in a range of 20 per cent to 24 per cent from a year earlier.
The ministry’s Tsai said fourth quarter exports -traditionally a busy season ahead of Christmas – dropped 8.6 per cent year-on-year.
December’s exports to the United States were down 2.6 per cent, compared with an 11.3 per cent contraction recorded the previous month.
Taiwan’s December imports, often seen as a leading indicator of re-exports of finished products, fell 11.4 per cent to US$30.96 billion, compared with economists’ expectations of a 10.2 per cent fall and after a drop of 8.6 per cent in November. CNA