Taiwan's imports scored a second consecutive month of double-digit growth in August, officials said yesterday fresh evidence that a long-awaited import recovery is catching up with the island's churning exports.

August imports came in at US$9.88 billion (HK$77.06 billion), the finance ministry said, up 19 per cent on August last year.

With August exports at US$10.72 billion, up a year-on-year 11.4 per cent, Taiwan's trade surplus totalled $835.8 billion, down 36.7 per cent compared to the previous year's surplus in August.

The August surplus was smaller than expected, reflecting an unexpectedly brisk rise for imports. Local and overseas economists had forecast a surplus of $1.05 billion, with imports forecast at $9.30 billion and exports at $10.36 billion.

The finance ministry welcomed the strong showings on both sides of the trade ledger.

``This indicates the performance of our foreign trade has entered a good state,'' the ministry said, adding that the double-digit gains in both exports and imports reflected rising trade with the US, Hong Kong, Japan, South Korea and Southeast Asia.

Ministry chief statistician Hsu Kuo-chung said his agency would boost slightly its forecast for full-year export growth to 7.5 per cent _ and perhaps even higher if demand from Hong Kong and rival China rises as some economists forecast.

The most recent official forecast, issued by the Directorate General of Budget, Accounting and Statistics, had called for a 7.3 per cent export rise in this calendar year.

``Overall exports could rise as much as 8 per cent if exports to Hong Kong increase by one to two percentage points,'' Mr Hsu said, noting that growth of exports to Hong Kong in the first eight months was a disappointing 1.1 per cent.

Hong Kong ranks second only to the US as a destination for Taiwan exports, accounting for 21.8 per cent of August exports at US$2.33 billion, but the lion's share of Hong Kong's imports actually are destined for China, reflecting Taiwan's half-century-old ban on direct trade with its diplomatic arch rival.

The August data gave a picture of exports leading a trade recovery from sharp downturns last year blamed on Asia's recession, though imports are now clearly picking up steam.

In the first eight months of this year, exports have risen 7 per cent to $78.1 billion compared with the same period last year, while imports have grown just 1.6 per cent to $70.57 billion.

During the first half, imports had been flat or lower in annual terms, but began picking up since May as the export surge prompted increased imports of raw materials and farm products by export manufacturers.

``Our export recovery has prompted agricultural and raw material imports to grow for four consecutive months,'' the ministry said.

The wealth generated by Taiwan's strong exports along with a year of concerted efforts to boost domestic demand also were contributing to the import recovery, particularly in imports of capital equipment, it said.

Taiwan's exports, for decades the economic lifeblood of a land-scarce island largely devoid of raw materials, sank 9.4 per cent last calendar year, reflecting sharp falls in demand from key trading partners Japan, South Korea and Southeast Asia.

Similarly, last year imports fell 8.5 per cent from the previous year.

The trade slowdown pared Taiwan's gross domestic product growth last year to just 4.7 per cent, enviable in much of Asia but far below the more typical pace of 6.8 per cent in 1997.

Officials are forecasting this year's GDP growth at 5.74 per cent.