World Economy

Taiwan Likely to Report 15th Month of Export Drops

Taiwan Likely to Report 15th Month of Export DropsTaiwan Likely to Report 15th Month of Export Drops

Taiwan is expected to report a year-on-year decline in export orders for June despite signs of that orders placed to Taiwanese electronics makers have started to pick up again, the Ministry of Economic Affairs said Saturday.

The expected decline in June largely reflects a relatively high comparison base of $36.6 billion seen in the same month last year and would be the 15th consecutive month in which export orders fall, the longest sustained slump in Taiwan’s history, the MOEA said, CNA reported.

The previous record was 12 consecutive months of declines in orders during 2008 and 2009, when a financial crisis hit the global economy.

In May, Taiwan’s export orders fell 5.8% from a year earlier to $33.73 billion due to a fall in Taiwan’s major outbound sales categories, including information/communication devices, electronics and precision equipment, base metal, petrochemical and machinery products, amid weak global demand.

In the first five months of this year, the country’s export orders were down 8.4% from a year earlier at T$165.37 billion.

The MOEA is scheduled to release the June export order data on July 20.

The ministry said there were some positive signs for export orders in June. Taiwan’s semiconductor sector benefited from a recovery in demand for communications chips from emerging markets and new Internet of Things and big data applications.

  Gloomy Outlook

The flat panel industry and the steel sector were beneficiaries of improving demand, which drove up product prices, and the petrochemical sector was helped by a rebound in international crude oil prices, the MOEA said.

But the ministry stressed that those positive factors were unlikely to fend off the impact of a relatively high base of comparison a year earlier.

The gloomy outlook for Taiwan’s export orders echoed data released by the Ministry of Finance earlier this month showing Taiwan’s exports in June falling year-on-year for the 17th consecutive month, the longest export slump in the country’s history.

Because of the poor performance of exports, which are the backbone of Taiwan’s economy, several economic think tanks have cut their forecast for the country’s economic growth for 2016 to less than 1%.

Among the think tanks, Academia Sinica, Taiwan’s top research institution, cut its projection for Taiwan’s 2016 economic growth by 1.22 percentage points to 0.52% on Wednesday.