Taiwan Exports Plummet as Coronavirus Threatens Trade Recovery

(Bloomberg) --

Taiwan’s exports plunged in January as the outbreak of the coronavirus threatens to bring a burgeoning revival in the island’s overseas trade to a swift end.

Overseas shipments fell 7.6% in January compared to the same month last year, Taiwan’s Ministry of Finance said Friday. Economists had expected an increase of 1% according to the median forecast in a Bloomberg survey.

The outbreak of the coronavirus could disrupt what had been one of the few economic success stories amid the U.S.-China trade war last year. Taiwan’s exports had grown two months in a row at the end of 2019 and the overall economy had appeared to withstand the trade war better than most of its peers in East Asia.

While Friday’s trade figures could have also been affected by the lunar new year holiday which fell in January, Taiwan’s Ministry of Finance said the virus could hurt trade in the first quarter.

“It is unlikely that Taiwan can be immune from this,” Barclay’s economist Angela Hsieh said, pointing out that nearly a third of all Taiwan’s exports last year went to China. “Demand for between 10 and 15 million smartphone units may be at risk in the first quarter due to the virus and it could get worse if the impact persists.”

The virus and China’s efforts to stop its spread have prompted economists at Goldman Sachs Group Inc, UBS Group AG and Macquarie Group Ltd. to cut their Chinese growth forecasts for both the first quarter and the full year.

To contact the reporters on this story: Cindy Wang in Taipei at hwang61@bloomberg.net;Samson Ellis in Taipei at sellis29@bloomberg.net

To contact the editors responsible for this story: John Liu at jliu42@bloomberg.net, Robert Fenner, James Mayger

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