Fri, Jul 29, 2005 - Page 10 News List

Consumers grow more pessimistic about outlook

By Jackie Lin  /  STAFF REPORTER

Consumer sentiment has remained weak this month on concerns that the nation's economic growth is losing momentum after several major organizations slashed their GDP forecasts for this year, academics said yesterday.

The consumer confidence index edged down 1.64 points from last month to 73.15 points this month, with all of its six components showing a downward trend, according to a monthly survey conducted by National Central University.

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

Among the six components, confidence in the nation's economic prospects saw the biggest drop, falling 2.45 points to 65.5 this month, with 55.4 percent of the 2,091 respondents polled expressing worries that the economy will take a turn for the worse in the next half year, the report said.

"I believe that lackluster export orders, the adoption of the new labor pension system and high oil prices in the previous weeks have all contributed to consumers' growing pessimism toward the future," report author Chu Yun-peng (朱雲鵬), who is head of the university's Research Center for Taiwan Economic Development, said during a telephone interview.

In addition, several organizations -- including the Directorate General of Budget, Accounting and Statistics, Academia Sinica and the Chung-Hua Institution for Economic Research (中經院) -- have all revised down their GDP forecasts to under 4 percent for the year, undermining hopes for a brighter future, he said.

"The public is concerned about the future. They feel like they cannot see any prospects, especially when the government has failed to present any economic reforms," said Shia Ben-chang (謝邦昌), professor of statistics and information science at Fu Jen Catholic University, which is responsible for taking polls for the confidence report.

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