TAIPEI: Taiwan’s export orders fell for the 13th straight month in April and at a far sharper pace than expected as demand in China and its other major global markets faltered, deepening challenges facing the island’s new government.
Export orders contracted 11.1 percent from a year earlier, well below the forecast of a 4.3 percent drop in a Reuters poll and a 4.7 percent slide in March.
Orders from all of Taiwan’s key markets fell by more than 10 percent, with its biggest customers China and the US down 10.9 percent and 11.4 percent, respectively, data from the Ministry of Economic Affairs showed.
The ministry said it expected the value of orders in the second quarter to decline from the same period last year.
Hours before the grim data, new President Tsai Ing-wen highlighted the problems facing the trade-reliant economy.
“This country urgently needs a new model for economic development,” Tsai said in her inauguration speech, adding it needs to find new markets and not rely too heavily on China.
Still, some analysts do not expect Tsai to unveil a quick fiscal stimulus program.
“Limited fiscal space will constrain the capacity of the government budget to fund Taiwan’s new growth model that is envisioned by Dr. Tsai,” Moody’s said in a note after the speech.
Taiwan’s export orders, which are dominated by orders for components used in smartphones, electronics and computing gadgets, are an indication of the strength of Asian exports and of global demand for hi-tech products in general.
Orders for precision equipment tumbled 26.4 percent in April, the biggest fall among major products, while those for information and telecommunication products dropped 10 percent.
Taiwan is struggling to shake off last year’s recession, with the economy shrinking more than expected in the first quarter as trade weakness showed no sign of abating.
Exports fell for the 15th straight month in April though not as much as expected. But the outlook remains bleak.
While the US economy appears to be improving, Asian exporters are not reaping the benefits as they have in the past. Indeed, US orders for Taiwan’s goods fell at a much sharper rate than in March, as did those from China and Europe.
The bleak order data is likely to cement expectations that Taiwan’s central bank will need to cut interest rates at least twice more this year, after three reductions since September.
Still, the central bank has acknowledged there is little it can do to combat a slowdown being induced by external factors.
Export orders contracted 11.1 percent from a year earlier, well below the forecast of a 4.3 percent drop in a Reuters poll and a 4.7 percent slide in March.
Orders from all of Taiwan’s key markets fell by more than 10 percent, with its biggest customers China and the US down 10.9 percent and 11.4 percent, respectively, data from the Ministry of Economic Affairs showed.
The ministry said it expected the value of orders in the second quarter to decline from the same period last year.
Hours before the grim data, new President Tsai Ing-wen highlighted the problems facing the trade-reliant economy.
“This country urgently needs a new model for economic development,” Tsai said in her inauguration speech, adding it needs to find new markets and not rely too heavily on China.
Still, some analysts do not expect Tsai to unveil a quick fiscal stimulus program.
“Limited fiscal space will constrain the capacity of the government budget to fund Taiwan’s new growth model that is envisioned by Dr. Tsai,” Moody’s said in a note after the speech.
Taiwan’s export orders, which are dominated by orders for components used in smartphones, electronics and computing gadgets, are an indication of the strength of Asian exports and of global demand for hi-tech products in general.
Orders for precision equipment tumbled 26.4 percent in April, the biggest fall among major products, while those for information and telecommunication products dropped 10 percent.
Taiwan is struggling to shake off last year’s recession, with the economy shrinking more than expected in the first quarter as trade weakness showed no sign of abating.
Exports fell for the 15th straight month in April though not as much as expected. But the outlook remains bleak.
While the US economy appears to be improving, Asian exporters are not reaping the benefits as they have in the past. Indeed, US orders for Taiwan’s goods fell at a much sharper rate than in March, as did those from China and Europe.
The bleak order data is likely to cement expectations that Taiwan’s central bank will need to cut interest rates at least twice more this year, after three reductions since September.
Still, the central bank has acknowledged there is little it can do to combat a slowdown being induced by external factors.
