| Taiwan's balance of payment in 2005 was in good shape. Current-account surplus, net inflow of financial account, and consolidated outstanding balance for balance of payment remained high. In the aspect of current account, along with the continuous expansion of the global economy, exports to neighboring economies in Asia, such as Mainland China and the six ASEAN member nations, grew. Due to run-up in crude-oil prices and increased demand induced by exports growth, imports value of agricultural and industrial raw materials grew considerably. With exports growing at a pace faster than imports, commodity trade surplus rose 11.5%. Income surplus decreased 18% from 2004, mainly to the implementation of the Homeland Investment Act by the U.S., which offers 5.25% preferential tax, compared with normal 25%, for overseas income repatriated by American businessmen back to the U.S. for investments by the end of 2005. As a result, outward remittance of investment returns by American businessmen shot up in the third quarter of the year. Service-trade deficit, though, expanded, due to decrease in net income from triangle trade and increased outlays for travel and financial services. Current-transference deficits also increased, due to increased outward remittance for family support. Despite increase in commodity-trade surplus, due to decrease in income surplus and increase in service and current-transference deficits, the surplus of current account (including commodity imports/exports, service, income and current transference) dropped to US$16.37 billion, down from 2004's US$18.5 billion.
Capital account, comprising mainly net outward remittance for emigration and outlays for purchasing intangible assets, chalked up deficit of NT$117 million, compared with deficit of US$77 million in 2004.
Monetary account registered a net inflow of US$1.78 billion, as net outflow for overseas securities residents by local residents and net inflow for securities investments in Taiwan by non-residents both hit record highs. The former comprises mainly investments in foreign funds and equity stocks by local residents via designated-purse monetary trust of local banks, as well as continues overseas investments by domestic insurance firms. The latter was due mainly to injection of huge foreign capital into the domestic stock market and continuous fund raising by domestic enterprises via issuance of corporate bonds and global depositary receipts abroad. |
