TAIPEI: Taiwan's export growth slowed to single-digits in October, but record sales volumes for the month point to continuing global demand that will likely sustain the island's economic momentum.
Taiwan factories are an integral part of the global supply-chain for technology giants such as Apple Inc, and the economy is riding a robust exports cycle on strong demand around the world for new smartphones and memory chips.
Exports in October rose 3.0 percent from a year earlier, the statistics agency said on Tuesday, compared with 9.86 percent forecast in a Reuters poll and 28.1 percent growth in September.
Beatrice Tsai, director-general in the statistics agency, said October exports posted the smallest growth in the last 13 months due largely to a high base from 2016 when shipments were bumped up due to delays caused by a typhoon in September.
"Benefitting from increasing global economic stability, as well as the peak-season effect for various consumer products, October exports of $27.54 billion is a record high for that month," Tsai told a news conference.
She added that the government remained optimistic about the island's export performance in 2017.
"This year we have a positive forecast, whether it's for electronic component parts or machinery, both export categories should reach historical highs," Tsai said.
PEAK SEASON AHEAD
Strong exports bode well for Taiwan's growth prospects in the final quarter, setting the economy on course to meet the government's GDP forecast of 2.15 percent this year.
Analysts said slower export growth in October should be considered against overall strong export performance this year as well as delays in iPhone X shipments.
"The exports situation from the end of the second quarter to the third quarter all along exceeded expectations, therefore the dip in October exports growth is understandable," said Carl Liu, an analyst at KGI Securities Investment Advisory Co Ltd.
"Since the iPhone X is not smoothly shipping out in accordance with what was expected, so the peak season in the fourth quarter is appearing a bit late," Liu said, adding that the peak season will be from December until the start of next year.
Apples's iPhone X was released for sale on Nov. 3 to strong worldwide demand.
Financial institution ING Group echoed the same view that smartphone sales would buttress the island's exports.
"While the high base effect depressed the year-over-year growth of exports and imports, we expect this year's smartphone sales to support exports," ING said in a note ahead of the data.
October exports to China grew 4.9 percent from a year earlier, compared with 29.6 percent in September, and US shipments rose 0.6 percent against 20.6 percent previously.
Imports rose only 0.1 percent from a year earlier, compared with September's 22.2 percent, shrinking the trade surplus to $5.2 billion.
Analysts expect economic momentum in Taiwan generated by tech gadgets to extend into 2018, giving the central bank leeway to leave interest rates unchanged.
Comments
Comments are closed.