Dampened by recent reports that utility and retail gasoline prices might be raised in the near future, consumer confidence plunged to the lowest point since 2001, a monthly survey released yesterday indicated.
Among the 2,124 respondents polled between June 18 and June 23, a whopping 88.5 percent said they believe consumer prices will climb up within the next six months. Only 9.7 percent of the surveyed consumers said prices will remain stable, according to the report prepared by National Central University's Research Center for Taiwan Economic Development.
In a similar downward trend, public confidence in household finances also dropped, with 56.7 percent of consumers expressing worries that their family finances will make a turn for the worse in the next six months.
"This has formed a confidence crisis and the government, especially the central bank, must be cautious in implementing policies to stimulate the economy," said Shia Ben-chang (謝邦昌), a professor of statistics and information science at Fu Jen Catholic University, which helped conduct the survey.
The report on the "consumer confidence index" was devised to gauge the public's expectations of stock performance, household finances, durable goods, job opportunities, consumer price fluctuations and the domestic economic outlook for the next six months.
The index last month edged up by 1.73 points to 74.79 from 73.06 in May thanks to the confidence rebound on stock investments.
According to statistics compiled by Taiwan Stock Exchange Corp, the TAIEX hovered under 6,000 points in May but surged to above 6,300 points last month, with the highest point falling at 6,373.86 on June 23.
Boosted by the strong stock market performance, 26 percent of the respondents said the next six months will be a good time to engage in stock investments, up from 17.6 percent in May.
"I think the government will have to make the financial and economic pie bigger, narrowing the gap between rich and poor to strengthen people's confidence," Shia said.
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