Taiwan’s exports increased faster than estimated, giving the central bank more scope to raise interest rates for the third time this year as the island’s economy recovers.
Shipments rose 21.8 percent in November from a year earlier, compared with a 21.9 percent gain in October, the Ministry of Finance said in Taipei today. The median estimate of 12 economists surveyed by Bloomberg News was for an 18.9 percent advance. Imports rose 33.8 percent for a trade surplus of $410 million.
The island’s central bank has raised interest rates at its last two quarterly meetings to prevent a real estate bubble. It has also pledged to halve foreign capital inflows driving up the currency and threatening exports, which are equivalent to two-thirds of Taiwan’s gross domestic product.
“Overseas demand continues to hold up well, particularly boosted by strong orders from Asia,” Kevin Wang, an economist at Grand Cathay Services Corp. in Taipei, said before the release. Wang expects the central bank to increase the benchmark rate by 0.125 percentage point to 1.625 percent at its scheduled meeting this month.
Today’s figures were released after the close of trading on the stock exchange. The benchmark Taiex stock index was little changed. The Taiwan dollar was also little changed at NT$30.630 against its U.S. counterpart at the 4 p.m. close, according to Taipei Forex Inc. The currency has risen 6.2 percent in the past three months, the most in Asia.
The appreciation and risks including Europe’s sovereign debt crisis threaten trade gains that have boosted earnings at companies including Hsinchu-based Taiwan Semiconductor Manufacturing Co., the world’s largest maker of chips designed by other companies.
The company will post record NT$155.6 billion ($5.16 billion) net income this year, according to the average of 28 analyst estimates compiled by Bloomberg.
Taiwan will allow more flexibility in the local dollar to absorb foreign liquidity and aim to reduce “hot money” inflows of speculative capital by half to NT$150 billion, central bank Governor Perng Fai-nan said Nov. 29.
Exports to China, Taiwan’s biggest overseas market, advanced 23.1 percent from a year earlier, after an 18.2 percent increase in October. Shipments to the U.S. climbed 32.1 percent after gaining 34.4 percent in October, the ministry said. Sales to Europe rose 27.8 percent, following an increase of 17.5 percent.
Exports of electronic products including semiconductors increased 16.4 percent last month after gaining 24.7 percent in October, today’s report showed. Shipments of optical products, including panels used in flat-panel TVs, fell 0.3 percent, following a decline of 7.2 percent in October.
A report yesterday showed the island’s consumer prices increased 1.53 percent in November, the fastest pace in nine months. Taiwan’s GDP is on course to expand 9.32 percent this year, one of the world’s fastest rates, according to projections by the International Monetary Fund in October.