BALANCE OF PAYMENTS
PRESS RELEASE Release Date: February 27, 2007
BALANCE OF PAYMENTS
For the fourth quarter of 2006, the current account registered a surplus of US$8.5 billion, the financial account recorded a net outflow of US$7.8 billion, and the Bank’s reserve assets increased by US$2.23 billion.
In terms of the current account, both exports and imports reached second- highest quarterly volumes on record. Exports grew by 7.4% over the same period last year (2005), mainly attributable to an increase in exports to neighboring Asian countries. Imports grew by 10.1%, led by an increase in imports of electronic products and crude oil. Because imports increased by a larger value than exports, goods surplus decreased by US$0.62 billion over the same quarter last year to US$7.85 billion. The services account deficit declined by US$0.25 billion over the same quarter last year to US$0.86 billion, mainly caused by an increase in merchanting trade surplus. Income surplus decreased by US$0.22 billion over the same quarter last year to US$2.43 billion, mainly due to the increase in outward remittance of equity securities investment income by non-residents. Current transfer deficit increased by US$0.02 billion from the year-ago level to US$0.92 billion. In sum, declines in goods and income surpluses, coupled with the increase in current transfer deficit, led the current account surplus to decrease by US$ 0.61 billion or 6.7% from the same quarter last year to US$8.5 billion.
With regard to the financial account, direct investment recorded a net inflow of US$1.18 billion while portfolio investment exhibited a net outflow of US$0.11 billion. Foreign direct investment (FDI) in Taiwan continued to hit record-high quarterly levels and reached US$2.86 billion in the fourth quarter of 2006, mainly attributable to the investment in the financial industry by non-residents. As a result, direct investment registered the first net inflow since the fourth quarter of 2001. Portfolio investment abroad by residents registered a net outflow of US$10.82 billion, mainly attributable to a sharp increase in residents' investment in foreign mutual funds and higher portfolio investment abroad by local insurance companies pursuing higher returns. Portfolio investment by non-residents recorded a net inflow of US$10.71 billion, mainly due to the increased foreign investment in the local stock market. Financial derivatives registered a net outflow of US$0.34 billion. Other investment exhibited a net outflow of US$8.53 billion, primarily on account of the expiration of the Bank's repurchase agreement transactions.
For the year 2006 as a whole, the current account showed a surplus of US$25.19 billion, increasing by US$9.17 billion from a year ago, and the financial account exhibited a net outflow of US$22.99 billion. The Bank's reserve assets increased by US$6.09 billion.
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Notes: 1. The next balance of payments data will be released at 16:20 p.m. on May 21, 2007.
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.