BALANCE OF PAYMENTS

For the first quarter of 2008, the overall balance of payments registered a surplus of US$11.32 billion, reflecting an increase in the Bank's reserve assets. The current account posted a surplus of US$8.66 billion, and the financial account showed a net inflow of US$0.39 billion.

In terms of the current account, exports grew by 17.6% from the same period of the previous year, supported by a steady increase in exports to neighboring Asian countries. Import growth was 26.4% over the same period last year, representing a record quarterly high due to a substantial increase in imports of grain and oil. As a result, goods trade surplus went down to US$4.48 billion, a US$2.85 billion decrease when compared to the same period of the previous year. The services account deficit narrowed by US$0.97 billion over the same period last year to US$0.05 billion, driven mainly by an increase in net surplus from merchanting services. The surplus in the income account grew by US$1.15 billion from the same period last year to record at US$5.11 billion, mainly boosted by growth in residents' income from direct investment. Current transfer deficit was US$0.88 billion. In sum, widening income surplus and narrowing services deficit were offset by the shrinking goods trade surplus, leading the current account to register a surplus of US$8.66 billion, an decrease of US$0.73 billion, or a 7.8% decline, over the same period last year.

With regard to the financial account, direct investment showed a net outflow of US$2.32 billion due to huge growth in residents' investment abroad with reinvested earnings. Portfolio investment turned from net outflows in the previous four quarters to post a net inflow of US$2.91 billion, mainly due to an increase in foreign capital inflow combined with a decline in domestic capital outflow. Non-residents' portfolio investment, mostly in government bonds and equity markets, exhibited a net inflow of US$9.31 billion. Residents' overseas portfolio investment showed a net outflow of US$6.4 billion, narrowing significantly by US$4.54 billion from the same period last year. Financial derivatives showed a net inflow of US$0.82 billion, while other investment exhibited a net outflow of US$1.03 billion on account of the increase of deposits in overseas affiliated branches by the banking sector.

Notes: 1. The next balance of payments data will be released at 16:20 p.m. on August 20, 2008.
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.