Taiwan’s export outlook turns more bearish on weak global demand

The decline in Taiwan’s exports is likely to accelerate as rising global inflation and China’s surging Covid outbreak sap demand, an economic official said.

Overseas shipments decreased 12.1% in December from a year earlier, after falling 13.1% the previous month, the Ministry of Finance said Saturday. The median estimate in a Bloomberg survey of economists was for a 15.8% drop.

Imports shrank 11.4% last month, compared to a median estimate of an 11.3% decline. 

The slowdown in Taiwan’s shipments in recent months comes after two years of strong growth. For 2022, Taiwan’s full-year exports rose 13.8% to a record NT$14.2 trillion ($462 billion). But the outlook for 2023 is much more bearish as inflation, tighter monetary policy and cooling consumer demand weigh on global trade.

The ministry said exports are likely to continue to shrink through the first quarter, without giving specific estimates. January shipments are expected to fall between 20% and 24%, the ministry’s chief statistician Beatrice Tsai said in a briefing Saturday.

Global sales of semiconductors remain the main driver of Taiwan’s exports with industry heavyweight Taiwan Semiconductor Manufacturing Co. set to provide crucial insight into the health of the sector when it reports its fourth-quarter earnings on Thursday. 

The company probably had record sales of NT$635.8 billion, according to the median estimate in a Bloomberg survey of analysts.