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Taiwan export orders decline by 16% in 2023

Inflation leads to slack export orders

Taiwan's exports decline 16% in 2023. (CNA photo)

Taiwan's exports decline 16% in 2023. (CNA photo)

TAIPEI (Taiwan News) —Taiwan’s export orders for 2023 totaled US$561.04 billion (NT$17.6 trillion), an annual decrease of 15.9%, according to an announcement by the Ministry of Economic Affairs (MOEA) on Monday (Jan. 22).

The MOEA noted that rising geopolitical risks and a conservative economic outlook amongst businesses led to a drop in manufacturing orders, according to UDN. December export orders also declined to US$43.81 billion, a 16% year-on-year decline.

Losses are expected to continue into January, with total exports expected to fall below US$40 billion, a further 15.8% to 20% year-on-year decline. Analysts expect the outlook for the first quarter of 2024 to be equally pessimistic.

MOEA Department of Statistics Director Huang Yu-ling (黃于玲) said the first quarter is typically the slow season for the electronics industry. Huang says inflation and high-interest rates have further suppressed consumer demand.

Additionally, rising geopolitical risks such as U.S.-China trade disputes and the Red Sea conflict will continue to dampen the chances of a global economic recovery, according to Huang. Regarding the impact of the Red Sea conflict, Huang says tension has pushed up freight rates and caused delivery delays for many industries. For example, the automotive supply chain is currently tight, according to Huang.

If Red Sea tensions continue, Huang said some analysts believe it could trigger inflation or further weaken demand. However, if it is short-term, its impact on inflation and supply chains will be limited.

Looking back on 2023, Huang said export orders spiked in November, ending a 14-month streak of year-on-year declines.

Huang said the December decline was due to weak demand for consumer products, supply chain adjustments, and inventory corrections. IT and electronic products saw a drop in orders in December, and traditional goods ranging from plastics to machinery and chemicals also saw double-digit year-on-year declines.