Taiwan's consumers are pessimistic about the nation's economic outlook and the negative sentiment will remain throughout the second half of the year, according to a survey released yesterday by MasterCard International Inc.
The poll was conducted from May 19 to June 10 via person-to-person or telephone interviews with 400 consumers based on five variables -- employment, economy, regular income, stock market and quality of life.
The result was represented by a scale ranging from zero to 100 with 100 standing for the most optimistic prospect. The consumer confidence index was 26.5, dropping from 58.9 in the same period last year.
"It is clear that SARS has had a very significant impact on consumer confidence in Taiwan," said Tina Chiang (
Although SARS has dragged consumers' confidence for the next half of the year to a historic low, Chiang said consumers showed comparably high expectations for employment and the stock market.
The TAIEX, which has gained 22 percent this year as of yesterday, closed down 114.36 points at 5,299.51.
"We expect Taiwan consumers will become more optimistic in the next 12 months," Chiang said.
The survey does not mesh with the results from another consumer confidence index report conducted by Taiwan Research Institute (台綜院), which was released late last month.
The institute's report is based on a poll of 1,132 residents which was conducted from June 14 to June 16 via phone interviews. The report said the confidence index was at 73.13 for last month, up from 72.34 in May. The private think tank pointed out that consumer confidence grew a little bit stronger as SARS was getting under control at that time.
The report pointed out as the graduation season was coming, pressure from possible unemployment pulled down consumer confidence, which also contradicted to the observation made by MasterCard International.
An economist, however, said the survey by MasterCard International may have less credibility due to the time it was conducted.
"From mid-May to early last month, Taiwan was listed as both a SARS-affected area and a region to avoid," Chou Ji (周濟), director of Chung-hua Institution for Economic Research's (中經院) Center for Economic Forecasting, said yesterday. "The time frame of their survey may not be able to represent the consumer confidence that exists now."
After Taiwan was removed from the SARS-affected area list by the World Health Organization last month, the government and private sector have been making an effort to revive the economy, which has successfully lured customers out to push up domestic consumption, Chou said.
For example, the local travel industry shows signs of picking up, as many discounted tickets or special tour packages were sold out, Chou added.
"I believe both the economy and consumer confidence will bounce back in the following months," Chou said.