Taiwan's exports fall 34% in April, worse than expected
Updated: 2009-05-08 07:17
(HK Edition)
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TAIPEI: Taiwan's exports in April slid a much worse-than-expected 34.3 percent year-on-year, as shipments to the United States and Europe suffered its worst fall in years.
The setback is the eighth straight annual drop for the island's export sector.
The latest data deal a fresh blow to the island's trade-dependent economy following improvements in February and March, when statistics had shown that the fall in US demand was becoming less severe.
However, analysts said the April data did not entirely point to a continued slump in US demand, after recent upbeat data on the US economy that had suggested that the world's biggest economy and Taiwan's second-biggest market, after the mainland and Hong Kong combined, was getting over the worst of the downturn.
"Taiwan's figures may not paint the whole picture for US and European demand. If you look at South Korea's April exports, figures look quite upbeat for these markets," said Ma Tieying, an economist at DBS.
"Taiwan's exports to these places slumped probably because the relatively weaker South Korean won made Korean goods more competitive."
Ma said that in seasonally adjusted terms, Taiwan's April exports had fallen 2 percent from a month earlier, reversing the rising trend seen in February and March.
Since the beginning of the year to the end of April, the Taiwan dollar had weakened 1.1 percent, while the Korean won had fallen 1.8 percent.
Taiwan's exports, which have been falling more than in the rest of Asia, will most probably record more falls in the coming months, though declines might ease, analysts said.
The fall in Taiwan's April exports, which totalled $14.8 billion, was worse than the 28 percent decline predicted in a Reuters poll and below South Korea's 19 percent drop. In March, Taiwan's exports slid 35.7 percent.
"April exports were worse than expected. It seems the economy has bottomed but not started picking up," said Alan Liao, an analyst at Chinatrust Commercial Bank.
"My initial expectation is that the GDP would still contract 8.5 percent in the first quarter, reflecting a similar view that the economy has bottomed but not begun to pick up."
Lin Lee-jen, the finance authorities' chief statistician, told a news conference that Taiwan's exports could be bottoming out and that May's fall would probably ease more significantly.
April's decline reflected a 33.7 percent drop in exports to the United States, the deepest fall since September 2001, and a 33.6 percent fall in exports to the mainland and Hong Kong.
Exports to Europe fell a sharp 37.0 percent year-on-year, which was the biggest decline since records began in 1989, finance ministry officials said.
Electronics exports fell 21.3 percent.
"I'm worried that the recovery is not as strong as we had expected," said Alex Huang of Mega International Securities. But whether it's a warning sign or it's only a month's weak performance still needs to be observed."
Huang added that he did not expect a further cut in interest rates for now.
Taiwan's central bank surprisingly left interest rates unchanged at a record low of 1.25 percent in March, its first pause after seven straight cuts to combat the global economic downturn.
The government forecast in February that exports will likely fall 20.1 percent this year, after rising 3.6 percent in 2008, but the economics minister has said Taiwan aimed for exports to be flat this year.
The official forecast for Taiwan gross domestic product is for a contraction of 2.97 percent in 2009, which would be the worst performance on record as the world economy suffers from a recession, hitting the island's exports and domestic consumption.
China Daily - Reuters
(HK Edition 05/08/2009 page16)