CBC reports US$3.46 billion deficit, 1st shortfall since ’08

The China Post news staff

The China Post news staff–The Central Bank of the Republic of China (CBC) yesterday reported the first deficit, a whopping US$3.46 billion, in international payments in three years, which it blamed on a flight of capital from the country occasioned by the European debt crisis.

As the European and U.S. debt crises worsened in the third quarter, stock markets across the globe slumped and foreign investors in Taipei cashed in their stocks, said Chen Yi-tuan (陳一端), deputy director of the CBC’s Department of Economic Research,

According to the CBC, foreign capital outflow in the third quarter totaled US$16.26 billion, an all-time high, as foreign investors dumped their stocks and government bonds in favor of cash, which they remitted overseas, causing a massive decrease in non-residents’ investment in securities.

The country’s third quarter deficit in international payments came to US$3.46 billion, the first deficit after successive surpluses for 11 months on end. In the third quarter of the year, Taiwan chalked up a US$10.21 billion current account surplus, while its financial account deficit came to US$11.57 billion. For the first three quarters of the year, the country’s accumulated current account surplus totaled US$29.21 billion, and the net outflow of financial account capital came to US$19.16 billion, while the surpluses in international payments totaled US$6.03 billion.

The country managed a US$7.71 billion surplus in commodity trade despite a slower pace of year-on-year growth in both exports and exports, according to Chen, who attributed the surplus to the greater value of exports over imports.