Taiwan’s Ministry of Finance (MOF) in its latest release stated the exim trade of the country in December as compared to the same period last year had slipped by 41.9 percent in exports and 44.6 in imports to $13.64bn and $11.78bn respectively. The release blamed global economic crisis for the country’s dismal performance for the last few months.
Lin Li-chen, the chief statistician of the MOF said that the severe drop in demand from the US and China for items including mobile phones, computer chips and laptops as the contributory factors for this piteous show in the export front. China and the US are the two biggest buyers of the Taiwanese electronic products and components.
Exports of electronic products and components alone registered a drop of 43.4 percent in December and in November it was 25.3 percent thus recording the overall exports slump to the lowest since October 2003. On the other hand, imports too declined for the third consecutive month, the December figures are the lowest since November 2003. The downward trend is worrying the traders as most of the business entities in Taiwan largely rely on exim trade, and exports account for about 70 percent of the GDP.
China is the largest trading partner of Taiwan and the export to China has declined by 0.8 percent in 2008, the first since 2001. Similarly, exports to European markets fell by 29.5 percent, while the same to the US dropped by 23.5 percent. Nevertheless, Taiwan still has a trade surplus of $1.86bn for the month of December.
As a damage control measure, the Central Bank of Taiwan has immediately reduced the interest rate of ten-day loans for banks from 2 percent to 1.5 percent, the sixth cut since late September. However, some analysts opined the cut in interest would only have a marginal effect as the magnitude of slump in international trade was so huge.