Taiwan's trade growth to decline sharply: DBS

Exports and imports to fall 11.6% and 9.4% respectively.

According to DBS, due to fewer working days caused by the Chinese New Year, exports and imports are very likely to show sharp declines(DBSf: -11.6% and -9.4% YoY respectively).

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Combining January and February, export growth is expected to average 5.1%, still up from 2.5% in 4Q12. Demand from China has maintained a steady uptrend eversince 3Q12.

Demand from Europe also appeared to have bottomed outin 4Q12. More recently, downside risks facing the US economy have surfaced due to budget spending cuts. But Japan’s growth data have turned positive thanks to the government’s aggressive push forthe twin easing of fiscal and monetary policies.

It seems that the corporate sectorin Taiwan shares the view that global economic outlook will improve this yearratherthan deteriorating further.

There are some signsthat businesssentimentisturning better and investmentspending hasstarted to recover – capital goods imports have showed MoM increases for two consecutive months since Dec12.