BALANCE OF PAYMENTS for the fourth quarter of 2004
PRESS RELEASE Release Date: February 21, 2005
BALANCE OF PAYMENTS
For the fourth quarter of 2004, the current account registered a surplus of US$2.17 billion, while the financial account recorded a net outflow of US$1.97 billion. The Bank’s reserve assets increased by US$2.90 billion.
In terms of the current account, both exports and imports hit historic highs. Boosted by exports to neighboring Asian countries, exports grew by 12.0% year on year. Imports grew by 26.0%, mainly due to increased imports of capital equipment and raw materials, which reflect surging prices of crude oil and raw materials. Because imports increased by a larger amount than exports, surplus on goods shrank to US$2.51 billion, a sharp decline of US$4.02 billion or 61.6% over the same quarter last year. The services account registered a deficit of US$2.21 billion, representing a large increase of US$2.12 billion from a year earlier. This was mainly caused by a decrease in merchanting trade surplus and an increase in freight payments and traveling expenses. Income surplus reached US$3.14 billion, increasing by US$0.82 billion from a year ago. This was mainly due to an increase in investment income from the residents’ foreign exchange assets and equity investments abroad. Current transfer deficit increased by US$0.55 billion from a year earlier to US$1.27 billion, mainly caused by an increase in outward remittances to overseas relatives. In total, despite an increase in income surplus, the widened deficit in services and current transfers, coupled with the decreased surplus in goods, made current account surplus drop to US$2.17 billion, a decrease of US$5.86 billion or 73.0% over the corresponding quarter last year.
With regard to the financial account, direct investment exhibited a net outflow of US$1.66 billion, and portfolio investment showed a net inflow of US$1.92 billion. Portfolio investment abroad by residents posted a net outflow of US$6.22 billion, mainly attributable to equity investment abroad by mutual funds. Portfolio investment by non-residents recorded a net inflow of US$8.14 billion as foreign investors continued buying domestic securities and domestic enterprises issued a total of US$2.29 billion in offshore corporate bonds and depositary receipts. Other investment showed a net outflow of US$2.23 billion, mainly due to an increase in local banks’ lending to foreign banks.
For the year 2004 as a whole, the current account surplus built up to US$19.01 billion. The financial account posted a net inflow of US$6.37 billion with the Bank’s reserve assets rising by US$26.60 billion.
Notes: 1. The next balance of payments data will be released at 16:20 p.m., May 20, 2005.
2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/EngHome/ESDDS/calacal.asp
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