Net financial outflows registered for twentieth consecutive quarter
Taiwan registered a net outflow in its financial account for the 20th consecutive quarter in the second quarter, raising concerns of a further exodus of funds at a time when the domestic economy has been slowing down.
According to statistics compiled by the central bank, Taiwan’s financial account, which measures the flow of direct investment and portfolio investments, showed a net outflow of US$15.3 billion in the second quarter.
It was the 20th consecutive quarter in which a net outflow was recorded, the longest streak in Taiwan’s history. Over that period. Taiwan’s total net outflow was US$204.71 billion.
In the second quarter, Taiwan had a net outflow of direct investment and securities investments in Taiwan totaling US$4.24 billion and US$10.40 billion, respectively, the data showed.
Residents’ portfolio investments abroad registered a net outflow of US$13.52 billion, mainly because of Taiwanese insurance companies increasing their holdings of debt securities overseas.
Non- residents’ securities investment saw a net inflow of US$3.13 billion during the quarter as foreign institutional investors boosted their holdings in local shares, the figures showed.
Dismissing concerns over a further net investment outflow, the central bank said that it is not unusual for countries like Taiwan that generally record a surplus in their current accounts to register a net outflow in their financial account.
The current account mainly measures a country’s merchandise and service exports.
The central bank said the Netherlands, Japan and Germany, which all consistently run current account surpluses, have recorded net outflows in their financial account for 36, 27 and 26 consecutive quarters, respectively.
Taiwan recorded a US$16.55 billion current account surplus in the second quarter that included a US$13.03 billion merchandise trade surplus and a US$1.97 billion surplus in trade in services such as tourism, the central bank said.