Taiwan's exports contracted for the ninth straight month in October as global demand stayed weak, adding to difficulties for the trade-reliant economy after a close call with recession. Annual exports in October dropped 11 percent, data from the Ministry of Finance showed on Monday. The outcome was in line with a Reuters poll and less than a 14.6 percent fall in September, but shipments to major markets saw a mixed performance.
Imports fell 20 percent from a year earlier, slightly more than the 18 percent fall expected in the poll. "We expect exports to continue contracting," said Kevin Wang, analyst with Taishin Securities. Wang said there is still downside risk for the global economy, in part due to China. The Ministry of Finance expects the export decline in the fourth quarter to be less than 10 percent from the same quarter a year ago.
Taiwan narrowly dodged a recession in the third quarter even as the economy contracted for the first time since the global financial crisis, with exporters suffering a crippling blow from faltering global demand and a slowdown in China. Taiwan is one of Asia's major exporters, especially of technology goods, and its export trend is a key gauge of global demand for technology gadgets world-wide. October exports to China fell 11.1 percent from a year earlier, a smaller fall than the 17.1 percent decline in September, while shipments to the United States and Europe worsened. Exports to the US dropped 9.1 percent in October, far worse than the 0.4 percent fall of September, while those to Europe fell nearly 12 percent, also wider than the 9.4 percent decline previously.
In October, electronics exports fell 4 percent and information and communications exports were off 14.4 percent. Both were slightly better than the respective 9.9 percent and 22.1 percent slump of September. Taiwan's exports only reflect a portion of what is produced on the island as many orders are farmed out to factories owned by Taiwan firms in China. The government's forecast is for exports to fall 7.1 percent in 2015, an estimate it gave in August and could revise later this month when it issues forecast revisions to GDP data. The island's worse-than-expected 1.01 percent slump in July-September gross domestic product was the first year-on-year contraction in six years, and prompted the government to announce a T$4.08 billion ($124.6 million) stimulus package to boost domestic consumption over the short term.