Taiwan balance of payments slip to USD 3.1b
Thanks to adjustment of imports offsetting the exports slowdown.
According to DBS, the BOP remained in surplus at USD 3.1bn, albeit smaller than USD 5.1bn in 1Q. The current account was consistently steady and strong, as the slowdown in exports was offset by a synchronous adjustment of imports, and the services account has continued to improve thanks to the further opening of tourism to mainland China.
Here's more from DBS:
Meanwhile, under the financial account, investment in the form of loans, trade credit and deposits posted a net inflow in 2Q, reflecting Taiwan’s status as a net international creditor, and the tendency of local investors to repatriate funds during the periods of global financial volatility.
The drag on the external balance mainly came from portfolio investment outflows, due to foreign selling of Taiwanese equities in 2Q. Domestic leading indicators such as export orders and consumer confidence don’t point to an immediate recovery in economic growth (thus corporate earnings) in the next 1-2 months. Equity flows will likely remain volatile and susceptible to shifts in global risk appetite in the short term, posing a major risk to the external balance and the Taiwan dollar.