TAIPEI (Reuters) – Taiwan’s exports fell in November for the third straight month and more rapidly than forecast due to the worsening state of the global economy, and with the outlook again clouded by inflation and interest rate rises around the world.
Exports dropped 13.1% last month from a year earlier to $36.13 billion, the lowest figure in 19 months though off a high base, but the biggest rate of fall in almost seven years, the Ministry of Finance said on Wednesday.
That was much worse than a forecast for a 6.7% contraction in a Reuters poll, and followed a 0.5% drop in October.
The ministry said global demand was slowing “more and more obviously”, hit by the war in Ukraine, unabated global inflation pressures and interest rate increase cycles in major economies.
Tony Phoo, senior economist for northeast Asia at Standard Chartered Bank, said weakening demand may continue until the first and second quarters of next year.
“If it continues into the second half of next year, Taiwan’s officially estimated economic growth rate of more than 2% next year will be under pressure,” he said.
Taiwan’s total exports of electronics components in November fell 4.9% to $15.15 billion, with semiconductor exports down 3.4% 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.
Taiwan’s exports to China, the island’s largest trading partner, plunged an annual 20.9% to $13.56 billion in November, after a 9.2% drop in October.
China’s exports and imports shrank at their steepest pace in at least 2-1/2 years in November, as feeble global and domestic demand, COVID-led production disruptions and a property slump at home piled pressure on the world’s second-biggest economy.
Taiwan’s finance ministry said risks ahead included uncertainty around China’s coronavirus policy and the U.S.-China tech war, adding that December exports could contract in a range of 8% to 12% from a year earlier.
The fourth quarter is traditionally the hot season for Taiwan’s exports as tech companies race to supply telephones, tablets and other electronics for the year-end holiday period in Western markets, but not this year.
Ministry official Beatrice Tsai said fourth quarter exports could drop more than 7% year-on-year.
November’s exports to the United States were down 11.3%, compared with a 3.1% expansion recorded the previous month.
Taiwan’s November imports fell 8.6% to $32.7 billion, compared with economists’ expectations of a 0.6% rise and after an increase of 8.2% in October.
(Reporting by Roger Tung and Sarah Wu; Additional reporting by Jeanny Kao and Fabian Hamacher; Writing by Ben Blanchard; Editing by Robert Birsel)
