In the current account, exports contracted by 5.5% over the same period last year, attributable to a higher base effect, China’s economic rebalancing, and weak economic growth in the US and Europe. Imports also trended down, registering a 5.8% year-on-year decline due to decreases in both export derived demand and capital goods imports. As the decline in exports exceeded that in imports, the goods trade surplus narrowed to US$5.62 billion, US$0.14 billion lower than the same period of the previous year.
The services account recorded a surplus of US$1.41 billion, an increase of US$0.91 billion over the same period last year, with a second highest quarterly record on the credit side mainly due to gains in both net proceeds from merchanting and travel receipts. Meanwhile, the income account surplus went up by US$0.27 billion over the same period last year to US$3.57 billion, mainly attributable to reduced equity dividends paid to foreign investors.
The US$0.60 billion current transfer deficit was US$0.56 billion narrower than a year before, since current transfer payments were higher last year because of the aid for Japan's March 11 earthquake. Overall, a narrower goods trade surplus was counterbalanced by wider surpluses in services and income accounts, as well as a smaller current transfer deficit. For the second quarter of 2012, the current account surplus expanded by US$1.61 billion, or 19.2%.
In the financial account, direct and portfolio investment posted net outflows of US$1.97 billion and US$13.53 billion, respectively. Residents' portfolio investment abroad exhibited a net outflow of US$7.42 billion, mainly due to rises in insurance companies' investment in foreign debt securities and residents' foreign mutual funds investment. Non-residents' portfolio investment showed a net outflow of US$6.11 billion, mainly due to shrinking domestic stock holdings by foreign investors. Other investment experienced a net inflow of US$8.09 billion, mainly owing to decreased short-term foreign lending and loans to overseas affiliates by the banking sector.

For the first half of this year, the current account recorded a surplus of US$20.96 billion, the financial account exhibited a net outflow of US$10.46 billion, and the overall balance registered a surplus of US$8.21 billion, reflecting an increase in the Bank's reserve assets.

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