Exports contraction to improve in July: minister
In advance of its official release of customs data, the Ministry of Finance said yesterday that Taiwan’s negative growth in exports should see a slight improvement in July.
The Ministry of Finance ( ) is scheduled to release its customs data for last month on Friday.
Finance Minister Chang Shengford ( ) indicated yesterday that July figures are likely to reveal negative growth in exports, marking the six consecutive month of decline.
But July’s export performance should see some improvement from the preceding month, according to the minister, who was speaking on the sidelines of a forum in Taipei.
“The contraction will have moderated slightly,” he said.
In June, Taiwan’s exports plunged 13.9 percent from a year earlier, the biggest fall in a single month over the last six years.
“The situation (with outgoing sales) should ease in the second half of the year — that is typically the peak season for exports,” he said.
For Bourse, the Worst
Is Past: Chang
Chang said that Taiwan’s poor quarterly economic data have already hit the local bourse and that its worst effects have passed.
Last week the government
re- ported a meager gain of only 0.64 percent in gross domestic product (GDP) in the second quarter, sending Taiwan shares on a tumble the following trading day.
“There is an impact on the bourse from Q2 data and we have already seen it — the stock market typically reacts early,” Chang said. “I believe the worst is over.”
60% of Weak Growth Due to Oil
The Finance Minister said that Taiwan’s disappointing economic growth data in Q2 is due to two factors: the falling price of international crude oil and weak global demand for Taiwan’s electronics.
He said that 60 percent of the plunge can be attributed to the declining price of international crude oil, which hurt Taiwan’s market pricing power and the export performance of mineral products.
“The second factor is in electronics — exports of electronics have fallen by about 10 percent. This is also a cause for concern,” Chang said.
Competitiveness Generally Stable, but Not in Electronics
Chang said that Taiwan’s overall competitiveness has remained fairly stable in most sectors besides electronics.
“With Taiex, we do need to regain the confidence of individual investors,” Chang said.
“We need to emphasize to everyone that 60 percent of (the reason for weak Q2 growth) is a decline in oil prices and not a decline in Taiwan’s overall competitiveness — though the electronics sector in particular has become less competitive.”
The minister said that the Executive Yuan has taken measures to upgrade Taiwan’s electronics sector, which is becoming increasingly threatened by the emerging supply chain in China’s tech sector.