In the current account, both exports and imports reached record quarterly highs. Exports rose by 19.4% from the same period of the previous year, mainly supported by increased external demand on the back of continuous growth in the global economy. Imports also grew 22.5% year on year, reflecting rising prices for agricultural and industrial raw materials as well as greater export derived demand. As a result of the higher growth in imports than exports, goods trade surplus shrank by US$0.56 billion from the same period last year to US$5.60 billion.

The services account recorded a surplus of US$1.11 billion, representing an increase of US$1.10 billion from a year ago, mainly due to increases in net proceeds from merchanting and travel receipts. The income account surplus inched up by US$0.24 billion to US$5.12 billion, mainly bolstered by higher income from residents' direct investment abroad and foreign exchange asset investment. Current transfer deficit widened by US$0.36 billion from a year ago to US$1.07 billion, accounted for mainly by anti-trust penalties imposed by the US and European countries on several major LCD panel producers in Taiwan. In sum, a narrower surplus in goods and a wider current transfer deficit, combined with relatively larger increases in surpluses of both services and income accounts, have led the current account surplus to widen by US$0.42 billion, or 4.1%.

With regard to the financial account, direct and portfolio investment exhibited net outflows of US$4.56 billion and US$12.02 billion, respectively. Residents' direct investment abroad posted a net outflow of US$2.26 billion, while non-residents' direct investment turned into a net outflow of US$2.30 billion as foreign enterprises transferred their equity holdings to local enterprises. Residents' portfolio investment showed a net outflow of US$8.58 billion, primarily due to investment in overseas debt securities by insurance companies and residents' investment in overseas mutual funds. Non-residents' portfolio investment also registered a net outflow of US$3.43 billion, as foreign investors were less enthusiastic about the Taiwanese stock markets during this period. Other investment exhibited a net inflow of US$13.38 billion, largely attributable to decreases in foreign lending and increases in foreign borrowing by the banking sector, and the withdrawal of overseas deposits by the private sector.

Notes: 1. The next balance of payments data will be released at 16:20 p.m. on
August 19, 2011.
2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/ct.asp?xItem=30164&ctNode=515&mp=2.