Tue, Aug 16, 2011 - Page 12 News List

Public less confident in economy: poll

FEELING GLOOMY:Swings in the financial markets have also curbed interest in making housing purchases, with 70 percent saying it was unwise to make real-estate purchases

By Crystal Hsu  /  Staff Reporter

Swings in global equity markets have dampened the public’s confidence in the nation’s economic outlook, with many people no longer foreseeing the TAIEX rising above the 10,000-point mark this year and most feeling that it would be unwise to buy a house in the near term, a survey released yesterday showed.

All confidence gauges pointed down this month from last month except for the inflation reading, as more respondents — 81.9 percent — expected consumer prices to climb higher in the next six months, from 79.9 percent last month, according to the monthly survey by Cathay Financial Holding Co (國泰金控), the nation’s largest financial service provider by assets.

The survey — conducted online in the first week of this month and completed by 14,121 people — might understate the impact of the global equity corrections on investor confidence in Taiwan as the debt crisis in Europe deepens and as the US economic recovery looks precarious.

The number of respondents feeling bullish about the main stock index rallying above 10,000 points dropped to 43 percent this month, from 54 percent earlier this year, while 40 percent adopted a bearish view, the survey indicated.

“Now, many have trimmed their expectations to 8,000 points, as we look toward the presidential election and amid global economic uncertainties, compared with the previous estimate of 9,220 points in January,” said Achilles Chen (陳欽奇), an assistant manager at Cathay Financial’s economic research department.

The revision may widen if global equities continue to seesaw, Chen said.

The TAIEX gained 2.39 percent, or 182.37 points, to close at 7,819.39 yesterday, taking cues from rebounding European and US bourses over the weekend.

The financial market volatilities not only lowered appetites for risky assets, but also curbed interest in making housing purchases, the survey found.

Close to 70 percent of respondents said it was unwise to buy real estate now, while almost 50 percent felt that it would be a good time to sell property in the next six months, according to the survey.

“The increasing gap may help end the tug-of-war in the housing market because of the luxury tax,” Chen said.

Meanwhile, a total of 61.5 percent reported no wage increase in the past six months, while 68.7 percent said the trend was likely to persist for the next six months, the survey showed.

About 36 percent said job hunting was not easier in the past six months, while nearly 40 percent do not expect an improvement in the situation in the next six months, the survey showed.

Against this backdrop, 33 percent voiced interest in purchasing durable goods in the coming six months, the survey said, down from 37.8 percent one month earlier.

Cathay Financial is due to launch its financial conditions index today, based on data from domestic bond, equities, foreign exchange and overnight lending markets.

“The index offers a snapshot of the nation’s economy one to two quarters ahead, allowing the public to get a better picture of the state of the economy to help them plan their finances,” Chen said.

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