Exports get another jolt but decline is easing
Updated: 2009-06-09 07:41
(HK Edition)
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TAIPEI: Taiwan's May exports fell less precipitously than had been expected. The easing of the downward trend resulted from higher than expected shipments to the US and the mainland. Official data showed that overseas shipments dropped 31.4 percent from a year earlier, following a 34.3 percent decline in April, Taiwan's finance department said yesterday.
Exports, a key driver of economic growth, are expected to log more declines in coming months, although some analysts predict the pace of the declines will ease as more signs emerge that the global slump in demand is bottoming out.
Citigroup economist Cheng Cheng-mount reckoned the pace of declines in orders from the mainland has eased significantly from the worst of the recession, when they fell by more than 50 percent.
Cheng believes Taiwan's export decline has hit bottom. Export data in May were better than expected. Exports for the second quarter are expected to show an improvement over the first quarter.
"Though there's little sign that consumer confidence has been rising in the United State, we need to observe the data further. South Korea's export was the best in Asia in the first quarter, probably helped by its currency depreciation. But there's no guarantee that its export data will also fare well in the second quarter," Cheng said.
HSBC senior Asia analyst Frederic Neumann said the numbers are so low that they do not represent a major upside surprise given the weak numbers.
He told the media that financial sentiment has run ahead of the economic reality to some extent.
"I would argue that actual demand elsewhere isn't quite strong enough, otherwise Taiwan would have seen better numbers. There is anecdotal evidence that some of the Taiwan tech companies are taking bigger orders for June, so possibly we'll see better readings for summer. But at this stage, it is clear we have a long way to climb up."
The government forecast in May that Taiwan's exports will likely fall 21.8 percent in 2009, after rising 3.6 percent in 2008. It expected Taiwan's economy to contract 4.25 percent in 2009, the worst performance on record as the world economy suffered from a recession, hitting the island's exports and domestic consumption.
China Daily/Reuters
(HK Edition 06/09/2009 page2)