The consumer confidence index rose for the fifth straight month this month to its highest level in a year, as a proposal to revise the capital gains tax on securities investments fueled optimism over a stock market revival, a National Central University survey showed yesterday.
The index climbed 0.96 points from a month earlier to 78.25, the survey by the university’s Research Center for Taiwan Economic Development, which polled 2,424 people over the age of 20 from May 19 to Wednesday last week, showed.
This month’s survey showed improvements in public expectations about the stock market’s performance, durable goods, job opportunities and consumer prices, but concern remained over the two other components of the index — household finances and the economic outlook.
Public confidence in the stock market’s performance saw the biggest increase among the six sub-indices, gaining 7 points from last month to 70.1 and rising for a sixth consecutive month, the center said.
“The sub-index of stock investment rose to its highest since August 2011, an indication that the government’s proposal to amend the capital gains tax on securities investments has cheered investors,” center director Dachrahn Wu (吳大任) said by telephone.
However, sluggish economic growth in the first quarter — which rose only 1.67 percent from a year earlier — continued to weigh on public sentiment about the outlook for the economy and household finances in the next six months, Wu said.
The sub-index of economic outlook slid 2.15 points to 74.7 this month from last month, while the sub-index of household finances fell 1.45 points to 74.25, data showed.
On Friday, the government cut its GDP growth forecast for this year to 2.4 percent, from its February estimate of 3.59 percent, citing weaker-than-expected momentum in exports and private consumption.
Yuanta-Polaris Research Institute (元大寶華綜合經濟研究院) yesterday said it would be difficult for economic growth this year to return to the long-term average level.
JPMorgan Chase Bank also trimmed its forecast for Taiwan’s economic growth this year to 2.5 percent, from its prior estimate of 2.7 percent.
“The improvement in external demand in the second half of this year may take a while to feed through to the domestic labor market and hence private consumer demand,” JPMorgan’s Hong Kong-based economist Grace Ng (吳向紅) said in a note on Friday.
Economists have said that the central bank may initiate another cycle of interest rate cuts if the economy contracts this quarter, or if the recent deterioration of regional data accelerates.
However, HSBC Greater China economist Donna Kwok (郭浩庄) said the government is more likely to introduce administrative and fiscal measures rather than interest rate cuts, as the economy is expected to remain in positive territory this year.