Sat, Mar 27, 2004 - Page 10 News List

Consumer confidence falls sharply

UNCERTAIN FUTURE Political and economic instability is prompting consumers to re-evaluate their financial situation for the upcoming six months

By Jackie Lin  /  STAFF REPORTER

Consumer confidence crumbled this month in the face of political uncertainties, a National Central University survey found yesterday. The consumer confidence index dropped 4.18 points to 79.52 points, its lowest since October, the poll said.

"Consumers appear more pessimistic and conservative about the economic outlook over the next six months, displaying their worries about political and economic instabilities," said Chu Yun-peng (朱雲鵬), head of the university's Research Center for Taiwan Economic Development.

The center conducted the poll of 1,252 people aged above 20 from Wednesday last week to Sunday, a period which included the assassination attempt on President Chen Shui-bian (陳水扁) on Friday and the presidential election the following day. The survey had a margin of error of plus or minus 2.8 percentage points.

The index gauges the public's expectations on stock performance, household finances, durable goods, job opportunities, consumer price fluctuations and the economic outlook for the next six months.

Of the poll's six categories, the index for stock investments saw the biggest slide, declining by 23.4 points to 66.1 points. Chu said that 51.9 percent of the respondents said they would stay away from the stock market in the near future, an increase of 5.7 percent from the previous month.

The TAIEX closed down 24.11 points at 6,132.62 yesterday. For the week, the benchmark index has dropped 10.1 percent since the election.

"I have suffered a book loss of around NT$170,000 in stocks since the election," said Steven Huang (黃軍儒), a 27-year-old financial professional at a local brokerage house. "But I believe the gloomy conditions will not last long, because the nation's economic fundamentals are still sound."

The nation's leading indicators, a gauge of economic activity, rose 0.7 percent to 107.6 points last month, the Council for Economic Planning and Development (CEPD) said separately yesterday.

Job opportunities remained a concern, as the employment part of the consumer confidence index fell 0.25 points to 59.7 from the previous month, the lowest figure in the six categories, another economist said yesterday.

Although public confidence in employment has not fallen, "I'm afraid that when the implementation of the government's job-creation scheme is due, there might be a new wave of unemployment," Day Jaw-yang (戴肇洋), deputy director of Research Division III at the Taiwan Research Institute (台綜院), said.

The jobless rate rose 0.08 percentage points to 4.61 percent last month, with around 468,000 people out of work, the Directorate-General of Budget, Accounting and Statistics reported earlier this week.

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