TAIPEI (Reuters) – Taiwan’s exports, a key gauge of global demand for gadgets, fell slightly for a second month in April and the government said the second quarter would be tough due to the coronavirus pandemic and renewed concerns over U.S.-China trade friction.
FILE PHOTO: A container truck drives pass Evergreen Marine’s containers at Kaohsiung Port, Taiwan August 7, 2017. REUTERS/Tyrone Siu
Exports dropped 1.3% from a year earlier to stand at $25.24 billion(20.37 billion pounds) in April, the finance ministry said. A Reuters poll had forecast an annual drop of 1%.
In March, Taiwan’s exports slipped 0.6%, but they have risen 2.4% on the year so far in 2020.
The ministry said strong demand for telecommuting amid the coronavirus outbreak and advanced chips was offset by weakening global consumption for products from textiles to minerals.
Taiwan, whose largest trading partner is China, warned of “limited” growth prospects for the island’s exports in the first half, adding that lingering concerns over U.S.-China trade could add to the uncertainty.
Taiwan’s May exports were expected to range from a decline of 4% to 6% on the year, Beatrice Tsai, head of the ministry’s department of statistics, told reporters.
She said it would be “difficult” for exports to maintain growth in the second quarter and the ministry will need to “significantly” trim its earlier forecast of a yearly growth of 2.5% for the period due to gloomy global economic outlook.
While Taiwan has so far prevented a rapid spread of the disease without a total lockdown, the government has repeatedly warned of an uncertain trade outlook and is rolling out an economic stimulus package worth T$1.05 trillion ($35 billion).
It has also pledged to lure manufacturers to move production home from China, saying returning investment to Taiwan from China would reach over T$320 billion this year and give a boost to its economy.
Last month, Taiwan downgraded its growth forecast for this year to between 1.3% and 1.8%, from 2.37% in February.
In neighbouring China, exports unexpectedly rose in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic, but a big fall in imports signalled more trouble ahead as the global economy sinks into recession.
($1 = 29.8390 Taiwan dollars)
Reporting by Yimou Lee, Emily Chan and Ben Blanchard; editing by Philippa Fletcher