Consumer sentiment in Taiwan fell to its lowest level in five years, said MasterCard Worldwide's biannual forecast on consumer confidence, retail sales and travel departures in the first half of the year in 13 Asian economies, yesterday.
"Taiwan's consumer confidence index of 29.7 is the lowest that we've seen since the 26.5 registered in 2003 at the peak of the SARS crisis, reflecting pessimism especially in terms of prospects for employment, quality of living and the economy in the first half of 2008," said Tina Chiang (
With a score of 50 as the dividing point between optimism and pessimism, Taiwan's 29.7 is a far cry from China and Hong Kong's 85.5 and 85.9 respectively, let alone Vietman's 94.3.
Besides the consumer confidence index, Taiwan also lagged in a survey of 13 Asian markets in Mastercard Worldwide's travel and retail indices.
MasterCard Worldwide forecast that retail sales and resident departures in Taiwan for the first half of the year would rise 2.9 percent and 1.2 percent respectively from a year ago.
In comparison, China and Hong Kong would see growth of more than 10 percent in retail sales, while outbound tourism would increase 12.4 percent and 5.6 percent respectively year-on-year, MasterCard data showed.
The company also predicted that Taiwan's GDP would expand 2.8 percent this year -- ahead of Japan's 1.2 percent and New Zealand's 1.9 percent among the 13 Asian economies.
"The political uncertainty and the aftermath of the US subprime crisis have dampened an already lackluster economy," Chiang said. "I have to say that 2008 is a very challenging year [for Taiwan]."
However, Chiang said that, as the survey was conducted last month, it did not reflect the impact of the legislative elections this month. She said she wouldn't rule out a recovery in Taiwanese sentiment after the elections.
In a separate research, the credit card company saw strong potential in China's middle-class, single women or double-income-no-kids households.
Luxury goods, insurance policies, overseas travel and real estate are this market segment's favorite consumption or investment targets. Quality, not price, is the key factor that affects these consumers' purchasing decisions, the research said.
China's middle-class market, consisting of households with annual incomes of US$7,500 to US$25,000 and ranging in age from 20 to 49, is likely to hit 100 million people by 2016, up from 35 million in 2006, the report said.