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Taiwan’s export orders have declined for the 11th straight month in July, due to various macroeconomic factors, including weak demand from China and high interest rates. The Ministry of Economic Affairs reported that export orders fell by 12.0% from a year ago, reaching .73 billion. This decline was slower than June’s drop of 24.9% and also beat the forecast of a 16.5% fall according to a Reuters poll.

The ministry stated that persistently high inflation and rising interest rates, as well as the global repercussions of the Russia-Ukraine conflict, may continue to hinder economic growth in the upcoming months. However, there is some optimism as the decline in export orders was better than expected.

Huang Yu-ling, director of the ministry’s statistics agency, attributed the slight improvement to increased shipments of information and telecommunications products, particularly those related to artificial intelligence (AI). Huang also mentioned a potential busy season effect in the third quarter, which typically sees increased demand in Western markets for the end-of-year shopping season.

Taiwan’s export-dependent economy has been affected by soft demand for its technology products due to global economic uncertainty. As a result, the government recently forecasted that the country’s economy would grow at its slowest pace in eight years. Major Taiwanese companies like Taiwan Semiconductor Manufacturing Co Ltd are significant suppliers to global tech giants such as Apple Inc and Nvidia.

The ministry expects export orders in August to decline between 10.2% and 13.9% compared to the previous year. In July, orders for telecommunications products fell by 14.9%, while electronic products saw a decline of 0.4%. Taiwan’s orders from China were 4.2% lower compared to the previous year, showing an improvement from the prior month’s 19.7% drop.

Orders from the United States fell 18.6% compared to the previous year, while orders from Europe decreased by 32.0% in contrast to June’s 44.2% decline. Orders from Japan dropped by 6.7% year-on-year.

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