* Gov't says sees export boost from launch of new iPhone
* Aug exports up 1 pct y/y, beat forecast but growth modest
* Electronics component exports only sector that rose
* Tepid trade, weak inflation may put 5th rate cut on the
(Adds ministry comment, details)
By Jeanny Kao and Faith Hung
TAIPEI, Sept 7 Taiwan's exports grew more than
expected in August as global retailers began stocking up
smartphones and other hi-tech gadgets ahead of the year-end
shopping season, but the rise was slight, keeping the chance of
another interest rate cut alive.
Wednesday's trade data followed weak inflation readings and
comes three weeks before the central bank's next policy meeting,
building a case to keep monetary conditions loose to support the
ailing trade-reliant economy.
Exports rose 1.0 percent from a year earlier, expanding for
the second month after July's 1.2 percent rise snapped a
17-month losing streak. While that beat market expectations for
a 0.4 percent rise, the rate of expansion was still tepid.
"The global economic recovery is soft. Price falls in global
oil and agricultural and industrial raw materials have slowed...
Luckily, semiconductor demand was strong," the Ministry of
Finance said in a statement.
Traditionally, Taiwan's exports are bigger in the second
half of the year due to new product launches before Christmas.
This year, Apple Inc's launch of the iPhone 7 is
expected to boost shipments, though some analysts fear demand
for the latest model will not be as strong as in the past.
Exports to China and the United States, Taiwan's top two
markets, rose 3.5 percent and 5.7 percent on-year, respectively,
the ministry said, adding it expects further improvement in
shipments to major markets.
Exports to Europe rose 2.1 percent, but those to Japan fell
Imports slipped just 0.8 percent, marginally worse than a
0.2 percent in July but much better than the 3.4 percent decline
that economists had feared.
Still, with the trade sector far from being back on steady
footing, the door may be open to a fifth straight central bank
rate cut this year.
The overnight interbank rate opened Tuesday and Wednesday at
its lowest level since late June, the last time the central bank
sliced the policy discount rate.
And data earlier this week showed the consumer price index
rose just 0.57 percent in August from a year ago.
"There is room for the central bank to trim rates from the
current 1.375 percent," a DBS note said before the trade data.
Indeed, electronic components was the only export category
that expanded in August, surging 14.8 percent on-year, while
shipments of information, communications and audio and visual
products showed no growth at all. Exports of machinery products
and transportation equipment fell.
George Chang, head of Taiwan research at Yuanta Research in
Taipei, said Samsung Electronics recall of
fire-prone Galaxy Note 7 smartphones could indirectly help
Taiwanese tech exporters if consumers switch to Apple.
Taiwan's July export orders, a gauge of actual exports in
2-3 months' time, fell sharply, though a private activity survey
suggested a pick-up in August.
The trade outlook remains unclear, however, with the iPhone
7 expected to launch this week into a saturated market where
consumers are opting for lower-priced rivals that pack the same
features and quality.
(Additional reporting by J.R. Wu; Editing by Kim Coghill)