Monday February 9, 11:05 AM
UPDATE 2-Taiwan's January exports slump at record pace
By Lee Chyen Yee
TAIPEI, Feb 9 (Reuters) - Taiwan's exports in January slumped 44 percent from a year earlier, less than expected but still a record decline, providing another sign from an Asian trading centre that a slide in global demand is deepening.
South Korea and Japan have both reported record falls in exports and China has posted two consecutive months of falling exports as recession in the developed world hammers demand for Asia-made goods.
The slide in exports from Taiwan, a major global supplier of hi-tech products like personal computers, picked up from December's fall of 42 percent and marked a record fall for the second straight month, reinforcing forecasts for another interest rate cut of 25-50 basis points.
'Confidence has collapsed since the global financial crisis set in last year,' said Ma Tieying, an economist at DBS (D05.SI - news) in Singapore.
Electronics exports fell at a record pace of 45.3 percent, while total shipments to China, including Hong Kong, also fell at a record pace of 58.6 percent, though analysts said a week-long holiday break during the month might have worsened the slump.
Taiwan's exports to the United States fell by a record 26.5 percent in January. China and the United States are Taiwan's biggest export destination by country. (For a detailed table on export figures, please click)
Pointing to further declines, imports dropped more than one half from a year earlier and the island's economics ministry said earlier on Monday that export orders would drop about 10 percent this year.
However, the fall in exports was smaller than analysts had predicted, which Ma said could be a tentative sign that the slump is bottoming out.
'The numbers were weaker than last month, but not as bad as what most analysts were expecting. Things should not worsen much more,' Ma said.
'There'll still be a decline in export figures, but we won't see things get much worse from now on.'
Analysts said the timing of Lunar New Year holidays, which fell in late January this year and in February in 2008, may have exaggerated the decline in exports.
Indeed, accounting for the difference in working days, Tony Phoo, an economist at Standard Charted Bank, estimated the decline in exports at 27 percent.
'This would already be a big improvement over the 40 percent drop in December,' he said.
Unlike in December, Phoo said the latest data suggested the central bank would not need to step in with an emergency rate cut. However, he still forecasts further central bank rate cuts in comings months to support the weak economy.
Analysts expect the central bank to cut rates to 1.0 percent or 1.25 percent, either of which would be a record low, from 1.50 percent now, with some saying that a snap meeting is possible if GDP numbers are weak when the government announces the data on Feb. 19.
Consumers globally have cut back spending on electronics, such as game consoles and cellphones, as the worst financial crisis in decades plunged much of the developed world, including the United States, Japan and the euro zone, into recession.
The export slump has battered Taiwan, home to the world's top two micro-chip makers, TSMC and UMC , and producer of 80 percent of the world's laptop computers and more than 40 percent of its liquid crystal displays (LCDs), used in popular flat-screen TVs.
'It's hard for exports to stage any significant recovery in the first half of this year,' Lin Lee-jen, chief statistician at the finance ministry, told a news conference.
LINKS
> For more analyst comments..........
(Additional reporting by Jeanny Kao, Kelvin Soh; Writing by Neil Fullick; Editing by Kim Coghill) Keywords: TAIWAN ECONOMY/EXPORTS
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
