PREVIEW-Taiwan's exports may pick up, inflation to recede

* Exports median forecast +3.6 pct (prior month -4.2 pct

* Imports median forecast +0.33 pct (prior month -7.6 pct

* Balance median forecast $2.345 bln (prior month +$3.31 bln

* CPI median forecast +2.8 pct y/y (prior month +3.42 pct

* CPI due Friday, Oct 5, 8:30 a.m. (0030 GMT

* Trade due Monday, Oct 8, 4:00 p.m. (0800 GMT

TAIPEI, Oct 4 (Reuters) - Taiwan's exports are set to record their first growth in September after six straight months of declines, buoyed by demand for new electronics products ahead of the year-end shopping season.

A Reuters poll of 11 economists saw exports rising 3.6 percent from September a year earlier, after falling 4.2 percent year-on-year in August.

The forecast is in line with the central bank's assessment of strong overseas sales in early September, and that of the finance ministry which said that, in value terms, exports could return to growth, given a weak base effect from the previous year.

Nevertheless growth will remain subdued, with forward indicators pointing to tough times ahead. Orders for Taiwan's exports shrank for a sixth month in August


while the latest PMI survey showed orders for Taiwan's exports fell anew in September.

Fellow technology exporter South Korea reported a fall in exports in September, though not by as much as forecast.

The poll showed Taiwan's imports will barely grow, a reflection of lower prices for crude oil and some raw materials but also of manufacturers' unwillingness to buy materials and equipment as their markets remain uncertain.


The island's inflation is likely to pull back from recent highs brought about by bad weather pushing up vegetable prices, though it is set to remain above the central bank's comfort line of 2 percent.

The poll yielded a median forecast of 2.8 percent, lower than August's 3.42 percent.

The central bank warned at its policy meeting in September that it would be watching inflation closely, and that prices, rather than growth, would inform its rate decisions in future. It kept the benchmark rate on hold at 1.875 percent for the fifth straight quarter.

Analysts however see inflation falling further this year as agricultural output stabilises, the impact of the Federal Reserve's QE3 stimulus remains muted and after Taiwan's government delayed a planned rise in electricity prices.

That is likely to mean no change in rates at the next meeting in December, though a big fall in inflation would give the central bank room to move if the external demand situation deteriorated further.

FORECASTS CPI Imports Exports Balance (y/y %) (y/y %) (y/y %) ($ bln) Chinatrust 2.80 8.40 9.70 2.270 DBS 2.10 -5.30 -4.20 1.940

ING Financial Markets 3.20

Jsun 2.58 0.80 KGI Securities 2.90 -6.00 3.60 4.000 Masterlink 2.90 -4.00 1.40 3.100 Mega Securities 2.67 -3.62 3.78 3.560 Sinopac 2.43 -0.40 2.70 2.530 Standard Chartered 2.90 3.00 4.50 2.200 Ta Chong 2.82 3.20 3.30 1.700 Taishin 2.80 4.20 6.50 2.420 Yuanta 2.49 1.06 5.44 1.740

(Reporting by Taipei bureau; Editing by Sanjeev Miglani)

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