Consumer confidence and the public’s general economic outlook have tumbled to new lows this month as Europe’s ongoing debt problems continue and domestic inflation sends prices ever higher, a survey by Cathay Financial Holdings Co (國泰金控) said yesterday.
A total of 95.3 percent of respondents said consumer prices are higher now than they were six months ago and 91.5 percent expect the trend to persist in the six months ahead, despite the government’s altered electricity price-increase plan, which will now unfold in phases rather than one-off adjustments, the survey indicated.
The monthly survey, which polled 17,228 people online between May 1 and Monday last week, suggested the government has failed so far to ease expectations of price hikes after President Ma Ying-jou (馬英九) announced a three-stage increase to electricity rates. The new rates were slated to take effect this week, but will now be introduced next month and on Dec. 10.
Ma has said that if the state-run Taiwan Power Co (台電) can boost its cost efficiency, then 20 percent of the planned hikes would likely be unnecessary. Nevertheless, 95 percent of the respondents said they expect consumer prices to climb between 4.3 and 4.9 percent in the next six months, compared with the government’s latest consumer price index that said prices advanced 1.35 percent in March.
Heightening inflationary pressures coupled with stagnant wages took a heavy toll on consumer confidence, with 55 percent voicing a lower willingness to buy durable goods over the following six months, while 48.7 percent said they intend to cut big-term purchases, the survey found.
The declines match an equally dim view about the general economic outlook with pessimists polled outnumbering their optimistic counterparts by a record 44.3 percent, the survey said. A total of 60.5 percent of the respondents expect the economy to worsen in the coming six months, while 16.3 percent are upbeat about a pickup.
A fragile recovery in the US coupled with the eurozone debt crisis are to blame for the weak sentiment, while the government’s proposed capital gains tax on securities transactions must also shoulder its responsibility, the survey indicated.
Against this economically bleak backdrop, nearly 40 percent of respondents said they plan to trim stock investments, while 14.2 percent indicated a willingness to increase their holdings, the survey showed. Furthermore, 70.5 percent think it is unwise to buy real estate now and 52.4 percent hold negative views about the opportunities to sell property, the survey said, adding the findings would constrain housing transactions for months.