Taiwan: TWD bolstered by export performance and capital inflows – Commerzbank

Taiwan's Export Growth Remains Strong

According to Commerzbank analysts, Taiwan recorded a 20.6% year-on-year increase in exports for February, marking the thirteenth consecutive month of double-digit expansion, even after accounting for holiday-related fluctuations. The electronics sector and AI-driven products continue to drive export strength, though authorities caution that ongoing tensions in the Middle East could pose risks to future trade performance.

Consistent Trade Momentum

Although February's export growth of 20.6% year-on-year fell short of Bloomberg's 35.5% consensus forecast and was lower than January's 69.9% surge, it still represents over a year of solid double-digit gains for Taiwan's exports.

Strong demand for advanced semiconductors has supported the electronics industry, and exports related to artificial intelligence are expected to recover further as the impact of the Lunar New Year wanes in the coming months.

Export Destinations and Market Share

Shipments to the United States climbed by 33.7% year-on-year in February, following a remarkable 151.8% jump in January. The US now represents 32% of Taiwan's total exports, the highest proportion seen in the past 36 years.

Potential Risks Ahead

Beatrice Tsai, Director-General of the Department of Statistics, cautioned that an extended conflict in the Middle East could negatively affect Taiwan's export prospects. She noted that disruptions to shipping lanes and increased fuel costs might reduce corporate earnings and weaken consumer confidence.

Foreign Investment Update

Yesterday saw net foreign investment in Taiwanese stocks turn positive for the first time in two weeks, with inflows totaling USD 1.2 billion.

(This report was generated with the assistance of artificial intelligence and subsequently reviewed by an editor.)