Consumer confidence this month plunged to a new four-year low, affected by a mixture of economic and political factors, according to a report released by National Central University yesterday.
State-run oil refiner Chinese Petroleum Corp's (CPC, 中油) decision to increase gasoline prices on Feb. 14 and President Chen Shui-bian's (陳水扁) proposal last month to abolish the National Unification Council and unification guidelines were deemed the two most important variables driving down consumer sentiment, the report said.
The Consumer Confidence Index slid to 67.93, down by 5.21 points from last month, according to the report.
"This result records the lowest point since December 2001 because respondents were concerned about rising commodity prices and some non-economic factors" that have escalated political tensions, said report author Chu Yun-peng (朱雲鵬), head of the university's Research Center for Taiwan Economic Development, during a press briefing.
The index gauges the public's expectations on stock performance, household finance, durable goods, job opportunities, consumer price fluctuations and the economic outlook for the next six months.
Four of the six sub-indices dipped in the survey, with more respondents expressing pessimism about the near future. Two sub-indices -- durable goods and stock performance -- edged up by less than one point, respectively.
The consumer price sub-index showed the biggest decline. An overwhelming 87.7 percent of respondents said they were worried that commodity prices would continue to rise over the next six months, the survey showed.
The Directorate General of Budget, Accounting and Statistics (DGBAS) predicted last week that the consumer price index (CPI) this year will rise 1.71 percent year-on-year, a level that would not trigger inflation.
But as CPC said its gasoline price increases still aren't high enough to prevent losses from crude oil imports, Chu said inflationary pressure might build up this year.
The DGBAS yesterday announced that the jobless rate last month was 3.8 percent, the lowest level in the past five years.
However, 42.2 percent of the survey's respondents expressed worries that the employment environment might turn for the worse in the near future, up from 36.3 percent in the previous survey.
"This has much to do with the new labor pension system that has been in place since July last year," said Day Jaw-yang (
The pension system requires that employers set aside a minimum of 6 percent of an employee's monthly salary into an individual retirement fund. But statistics show that the profit margins of small and medium-sized enterprises, which form the nation's economic core, were below 6 percent in 2004.
"Employers have no other choice but to change their staffing methods by reducing the number of full-time workers and hiring more temporary staff, who enjoy fewer benefits," Day added.
The survey interviewed 2,711 consumers between Feb. 17 and Feb. 19.
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