Taiwan Trade Surplus Rebounds as Cost of Oil Imports Plunges

Taiwan’s trade surplus expanded to its widest in nine months in May, fueled by increased global demand for electronic equipment and weaker oil prices.

• Taiwan’s trade surplus expanded to $4.72 billion, its highest since August last year, according to a statement from Taiwan’s Ministry of Finance Monday. Economists had estimated a surplus of $2.55 billion.
• Imports fell 3.5% as the island’s bill for oil purchases plunged. The median economist forecast was for a 2.1% increase in imports.
• Exports fell 2% last month, compared to the median analyst forecast for a 4.2% decrease.

Key Insights

• Taiwan’s bill for crude oil imports fell 66% year on year in May to $720 million.
• Exports to China and the U.S. rose the most, gaining 10.6% and 9.3% respectively.
• Exports of machinery and electrical equipment, which make up almost half of Taiwan’s overseas shipments, continued to defy the declines in most other sectors, rising 9.1%.
• “If the reopening of economies in Europe and U.S. go well in the future, the electronics industry may be better than expected in the second half of the year,” according to Angela Hsieh, an economist at Barclays Bank Plc in Singapore. “The biggest uncertainty comes from U.S.-China relations, but the impact of that seems limited so far.”
• Orders from the electronics industry benefited from customers bringing orders forward, the finance ministry said.