Taiwan exports fall for 4th month in December, decline seen extending into Q1

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Exports fell 12.1% in value last month from a year earlier to $35.75 billion, the lowest in 20 months, the Finance Ministry said on Saturday.

This followed a 13.1% decline in November, and was slightly better than the Reuters poll forecast for a 13.3% decline.

For December, the ministry said global demand was gradually slowing, due to inflationary pressures and interest rate hikes in major economies, as well as disruptions in factory production in China amid a sharp rise in cases of COVID-19 after Beijing dismantled its zero-COVID regime.

The ministry saw Taiwan’s exports continuing to decline in the first quarter as it expected the global economy to “slow down significantly”, with major uncertainties posed by both the war in Ukraine and the spillover of COVID-19 in China.

“The positive demand driven by new technologies and increasing silicon content in the final products will not be able to compensate for these negative impacts,” the ministry said in a statement.

Taiwan’s total exports of electronic components in December fell 1.4% to $16.04 billion, with semiconductor exports up 0.8% from a year earlier.

Firms such as TSMC, the world’s largest contract chip maker, are key suppliers to Apple Inc and other global tech giants, as well as chip suppliers to low-end consumer goods and auto companies.

At $14.28 billion in December, Taiwan’s exports to China, the island’s largest trading partner, fell 16.4% from a year ago, after suffering a 20.9% drop in November.

Taiwan’s Ministry of Finance said the following risks included the uncertainty of the technological war between the United States and China, adding that January exports could contract in a range of ‘ 20% to 24% from a year before.

The ministry’s Tsai said fourth-quarter exports – traditionally a busy season before Christmas – fell 8.6% year-on-year.

December exports to the United States fell 2.6%, compared to a contraction of 11.3% recorded in the previous month.

Taiwan’s December imports, often seen as a leading indicator of re-exports of finished goods, fell 11.4% to $30.96 billion, compared with economists’ expectations of a 10.2% decline and after a fall of 8.6% in November.

(Reporting by Liang-sa Loh and Yimou Lee; Editing by Simon Cameron-Moore)

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