Print

Mail

wiki links

Consumers delay some luxury buys

Political instability is putting people off buying luxury goods, with cautious car buyers delaying their purchases. But economists said yesterday that the effects will be short lived.

"The political uncertainty is indeed an issue for us," said Steven Yang (楊湘泉), spokesman for Hotai Motor Co (和泰汽車), a local dealer for Japan's Toyota Motor Co.

Yang said some buyers had delayed their purchases as thousands of protesters demonstrate in front of the Presidential Office for a recount of Saturday's vote.

"We hope it will be a short-term problem," said Yang, adding that his company was closely monitoring the situation and might adjust its business strategy accordingly.

Economists expect the political dispute to sap consumers' confidence only briefly, as demonstrated by the limited decline in the stock market yesterday.

The TAIEX fell 2.94 percent to close at 6,172.89 points yesterday after shedding nearly 6.7 percent on Monday, the first trading session after the election.

"Investors are recovering from the shock," said Wu Chung-shu (吳中書), a research fellow at the Academia Sinica.

Private consumption and investment might slow for up to a month, but the impact will not undermine the nation's economic turnaround, Wu said.

The nation's economy grew 3.15 percent last year, lifted by improved private consumption despite the nation's heavy reliance on exports.

The government said yesterday it agreed in principle to a vote recount, but the opposition camp rejected a plan to revise the law to allow for the recount.

Nevertheless, "I'm optimistic about a quick settlement of the dispute," Wu said. "We'll stand pat on our economic outlook for the nation," barring any serious clash during an nationwide demonstration by pan-blue camp supporters this weekend.

Last December, Academia Sinica forecast that the nation's economy would expand 4.35 percent this year. The government forecast a growth rate of 4.74 percent.

Chang Hsin-ming (張欣民), director of the Research and Development division at Sinyi Real Estate Inc (信義房屋), shared the optimism, saying he remained upbeat about the nation's property market.

"We haven't detected that the political tensions are hurting buying sentiment," Chang said.

The decision to buy a house is usually a result of careful assessment, so buyers are unlikely to suddenly change their minds because of short-term factors, he said.

Wu Hui-lin (吳惠林), a research fellow at Chung-hua Institution for Economic Research (中華經濟研究院), said he was not worried about multinational enterprises fleeing Taiwan because of political instability.

"The government's firm stance of not using public funds to prop up stock prices shows its determination to follow free-market forces and this, to some degree, has buoyed local and overseas investors' confidence," Wu said.
This story has been viewed 2232 times.