This morning, one of the local newspapers reported that Taiwan experienced a capital outflow in the trillion dollar range in 2005. This clarification has been issued to help the general public gain a better understanding of Taiwan’s overall balance of payments and international investment position at the end of last year.
Central Bank of China
Release Date: February 21, 2006
This morning, one of the local newspapers reported that Taiwan experienced a capital outflow in the trillion dollar range in 2005. This clarification has been issued to help the general public gain a better understanding of Taiwan’s overall balance of payments and international investment position at the end of last year.
The balance of payments statistics published by the CBC yesterday shows that the current account (balance on goods, services, income, and current transfers) registered a surplus of US$16.366 billion in 2005. The financial account shows a net inflow of US$1.779 billion, a figure that comprises of a US$48.205 billion increase in Taiwan investment abroad (outflow) and a US$49.984 billion increase in foreign investment in Taiwan (inflow).
Aggregating the current account surplus, net inflow in the financial account, and net errors and omissions, Taiwan’s overall balance of payments recorded a surplus of US$20.056 billion in 2005.
It’s clear that Taiwan’s balance of payments is in good shape. A country’s balance of payments statistics should be investigated as a whole; paying undue attention to individual items that make up the overall balance could yield a conclusion that is both ambiguous and misleading.