July 7, 2020 / 9:04 AM / a month ago

UPDATE 1-Taiwan June exports down again, outlook clouded by virus

(Recasts, adds detail, byline)

* Taiwan June exports -3.8% y/y vs -3.0% in Reuters poll

* June imports -8.6% y/y vs -5.25% in poll

* Expects July exports -1.5% to -4% y/y

* Sees cloudy H2 outlook due to coronavirus, China-U.S. tensions

By Yimou Lee

TAIPEI, July 7 (Reuters) - Taiwan’s exports in June fell for a fourth straight month and at a faster pace than expected, with the government warning of pressure in the second half due to concerns about a new wave of novel coronavirus infections and U.S.-China friction.

Exports dropped 3.8% from a year earlier to $27.13 billion in June, the Finance Ministry said on Tuesday. A Reuters poll had forecast an annual drop of 3.0%. In May, exports slipped 2.0%.

The ministry said demand for telecommuting amid the coronavirus outbreak, which has forced millions to work from home, remained strong, with exports of products like laptops jumping to the second highest on record, up 13.8% from a year earlier to $4.02 billion.

Beatrice Tsai, head of the ministry’s statistics department, said strong global demand for semiconductors and telecommuting products was offset by weak demand for more traditional exports, like metals.

Exports in the second half will remain under pressure because of rising fears of a second wave of infections globally from the coronavirus - which Tsai called the “biggest risk” - as well as trade tensions between the world’s two largest economies, the United States and China.

Taiwan’s June imports fell 8.6% against economists’ expectations of a drop of 5.25%.

Tech powerhouse Taiwan, whose largest trading partner is China, could see July exports come in within a range of -1.5% to -4% on the year, Tsai added.

While Taiwan has prevented a rapid spread of the coronavirus without going into a total lockdown, the government has repeatedly warned of economic uncertainty and is rolling out a stimulus package worth T$1.05 trillion ($35.67 billion).

Taiwan’s central bank last month further reduced the growth outlook for 2020 to 1.52% from a forecast of 1.92% in March, saying the pandemic could curb exports, though some economists think the economy will shrink this year. ($1 = 29.4350 Taiwan dollars) (Reporting by Yimou Lee; Writing by Ben Blanchard; Editing by Sam Holmes, Robert Birsel)

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