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Taiwan July exports jump, but uncertainty ahead

Taiwan July exports jump, but uncertainty ahead

FILE PHOTO: Cargo trucks work inside a container yard in Keelung, Taiwan, January 7, 2022. REUTERS/Ann Wang

TAIPEI: Taiwan's exports rose in July on sustained demand for technology products with shipments to China picking up, and while the government said the outlook was good for semiconductors it warned of growing uncertainly for the global economy.

Exports rose 14.2 per cent in July from a year earlier to $43.32 billion, the Ministry of Finance said on Monday (Aug 8), the second highest monthly figure on record and up for the 25th consecutive month.

That was slightly slower than the 15.2 per cent rise recorded in June, but better than the 11.65 per cent expansion forecast from a Reuters poll.

The ministry attributed the growth pace to strong technology demand, especially for chips ahead of the year-end holiday shopping season, with supply chain problems easing.

July exports to China, Taiwan's largest trading partner, rose an annual 3 per cent to US$16.04 billion, after a 4.5 per cent contraction in June, suggesting an easing of disruptions caused by COVID-19 outbreaks in the country.

Overall exports of electronics components in July rose 15.6 per cent to US$16.96 billion, with semiconductor exports jumping 17.4 per cent from a year earlier.

Many companies expect global chip shortages to last at least for the rest of the year, which will continue to bolster Taiwanese semiconductor firms' order books.

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 electronics.

The finance ministry warned of a "high degree of uncertainty" for the global economy due to the war in Ukraine and inflationary pressures, even with sustained chip demand.

"The growth momentum is gradually becoming conservative, which is bound to affect our country's foreign trade situation," it added.

However, ministry official Beatrice Tsai said total exports this year should still be able to exceed $500 billion.

July exports to the United States were up 24.8 per cent, slower than a 27.9 per cent jump recorded the previous month.

China's export growth unexpectedly picked up speed in July, offering an encouraging boost to the economy as its struggles to recover from a COVID-induced slump, but weakening global demand could start to drag on shipments in the coming months.

Taiwan's July imports rose 19.4 per cent to US$38.29 billion, the third highest figure on record, better than economists' expectations of a 15.85 per cent jump, after an increase of 19.2 per cent in June.

Taiwan could see August exports increase by 8 per cent to 12 per cent from a year earlier, the finance ministry said.

Source: Reuters/gs

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