Macroeconomic Forecast Taiwan

Although exports of goods and services surged in H110 by an impressive 51.4% and 31.8% y-o-y, respectively, imports of goods and services grew even faster with corresponding growth rates of 67.6% and 39.8% y-o-y, thereby narrowing the current account surplus from US$23.4bn in H109 to US$20.9bn in H110. Going forward, we expect the current account surplus to continue shrinking over the coming months due to strengthening imports before widening in 2011 as a weaker Taiwanese economy - owing to a Chinese economic slowdown - leads to significantly weaker import demand.

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